The following information is available for an enterprise’s security investments as of December 31, 2008: Valuation Market Original Allowance Value Investment Cost 12/31/2007 Classification 12/31/2008 Costco stock $ 40,000 $3,000 dr. SAS $ 39,000 Wal-Mart bonds $ 30,000 $ 2,000 cr. TS $ 32,000 The Wal-Mart bonds were purchased at par value. SAS = securities available-for-sale TS = trading securities What is the 2008 holding gain or loss recognized in 2008 earnings and directly to stockholders’ equity? a. Earnings: $4,000 loss Stockholders’ Equity: $4,000 loss b. Earnings: $4,000 gain Stockholders’ Equity: $4,000 gain c. Earnings: $4,000 loss Stockholders’ Equity: $4,000 gain d. Earnings: $4,000 gain Stockholders’ Equity: $4,000 loss .

1. The following information is available for an enterprise’s
security investments as of December 31, 2008:
Valuation
Market
Original
Allowance
Value
Investment
Cost
12/31/2007
Classification
12/31/2008
Costco stock
$ 40,000
$3,000 dr.
SAS
$

2. 39,000
Wal-Mart bonds
$ 30,000
$ 2,000 cr.
TS
$
32,000
The Wal-Mart bonds were purchased at par value.
SAS = securities available-for-sale
TS = trading securities
What is the 2008 holding gain or loss recognized in 2008

3. earnings and directly to stockholders’ equity?
a.
Earnings: $4,000 loss Stockholders’ Equity: $4,000 loss
b.
Earnings: $4,000 gain Stockholders’ Equity: $4,000 gain
c.
Earnings: $4,000 loss Stockholders’ Equity: $4,000 gain
d.
Earnings: $4,000 gain Stockholders’ Equity: $4,000 loss