A Company Has a Long-Term Investment in Available-For-Sale Securities

Multiple Choice

A company has a long-term Investment in Available-for-Sale Securities.The intent is to hold the stock investment for many years,but not until maturity.The investor's percentage ownership is 5%.On January 1,2014,the purchase date,the cost of the stock investment was $100,000.On December 31,2014,the fair value of the investment is $99,000.An allowance account is used to write-down the investment.On January 10,2015,the investor sold the stock for $95,000.What journal entries are required on January 10,2015?

A) debit Allowance to Adjust Investment in Available-for-Sale Securities to Market for $1,000 and credit Unrealized Loss on Investment in Available-for-Sale Securities for $1,000
B) debit Cash for $95,000,debit Loss on Sale of Investment in Available-for-Sale Securities for $5,000 and credit Investment in Available-for-Sale Securities for $100,000
C) debit Cash for $95,000,debit Loss on Sale of Investment of Available-for-Sale Securities for $4,000 and credit Investment in Available-for-Sale Securities for $99,000
D) A and B