On January 1, 2004, Davis company sold some of its available for sale securities

Question

On January 1, 2004, Davis company sold some of its available for sale securities that originally cost $22,000 and whose market value at its last balance sheet date (12/31/2003) was $30,000. The securities were sold for $28,000. The sale will result in:

a. a debit to realized loss on sale of securities of $2,000

b. a credit to realized gain on securities of $2,000

c. a credit to realized gain on securities of $6,000

d. a debit to realized loss on sale of securities of $6,000

pls show the work, thank you

Explanation / Answer

a. debit to realized loss on sale of securties of $ 2,000

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