On January 1, Jewel Company buys $204,000 of Marcelo Corp. 10%, 36-month notes. Interest is paid on the last day of each month. The notes are classified as available-for-sale securities. This is the company's first and only investment in available-for-sale securities. On December 31, the notes have a fair value of $207,700. The amount that Jewel Company should report in the equity section of its year-end December 31 balance sheet for its investment in Marcelo Corp. is (Round your intermediate dollar values to the nearest dollar amount):
A. Unrealized Gain - Equity; $24,100.
B. Unrealized Gain - Equity; $3700.
C. Unrealized Loss - Equity; $3700.
D. Unrealized Gain - Equity; $20,400.
E. Realized Gain - Equity; $3700.
Answer: B
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