Palmon Industries owns an investment that experienced a decline during 2019 that has been judged to be "other than temporary". The investment is held in Palmon's available-for-sale debt securities portfolio, and Palmon expects to sell the impaired security before recovery of its amortized cost basis less current-period credit loss. The debt security was purchased in March 2018 at a cost of $460,000. At the end of 2018, the fair value of the investment was $520,000 and its amortized cost basis was $454,000. At the end of 2019, the fair value of the investment is $410,000 and its amortized cost is $448,000. What amount of loss will Palmon Industries report on its income statement for the year ending December 31, 2019 related to this investment?
A. an unrealized loss of $44,000.
B. an unrealized loss of $50,000.
C. an unrealized loss $110,000.
D. an unrealized loss of $38,000.
Answer: D
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