On February 15, Jewel Company buys bonds of Marcelo Corp. for $200,800. The investment is classified as available-for-sale securities. This is the company's first and only investment in available-for-sale securities. On December 31, the bonds had a fair value of $201,900. The entry to record the year-end adjustment is:
A. Debit Fair Value Adjustment-Available-for-Sale $1100; credit Realized Gain-Income $1100.
B. Debit Fair Value Adjustment-Available-for-Sale $1100; credit Interest Revenue $1100.
C. Debit Fair Value Adjustment-Available-for-Sale $1100; credit Unrealized Gain-Equity $1100.
D. Debit Cash $1100; credit Gain on Sale of Investments $1100.
E. Debit Cash $1100; credit Dividend Revenue $1100.
Answer: C
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