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How information reported in company financial statements

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Problem 1: A company holds an investment in corporate bonds classified as AFS. At the beginning of 2020, this investment is reported at a value of $4,000,000. Gains of $500,000 have been previously reported, and no impairment losses have been reported. At the end of 2020, the market value of the investment is $2,000,000, and it is determined that the decline in value is due to credit losses.

Question 1: How is this information reported in the company's 2020 financial statements?

Point A. $2,000,000 loss in income; no change in other comprehensive income

Point B. $1,500,000 other comprehensive loss; not reported in income

Point C. $500,000 other comprehensive loss; $1,500,000 loss in income

Point D. $2,000,000 other comprehensive loss; not reported in income

Reference no: EM132466663

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