On July 31, Potter Co. purchased 2,000 shares of GigaTech stock for $16,000. GigaTech has 100,000 shares currently outstanding. This is the company's first and only stock investment. On October 31, which is Potter's year-end, the stock had a fair value of $20,000. Potter should record a:
A. Credit to Fair Value Adjustment-Stock for $4,000.
B. Debit to Unrealized Gain-Equity for $4,000.
C. Debit to Unrealized Loss-Income for $4,000.
D. Credit to Investment Revenue for $4,000.
E. Credit to Unrealized Gain-Income for $4,000.
Answer: E
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