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Pie, Inc. owns common stock in multiple companies. The original purchase price of all stock...

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Accounting

Pie, Inc. owns common stock in multiple companies. The original purchase price of all stock was $2,300,000, the
fair value of the stock on 1231?2020 was $2,500,000 when the appropriate year end adjusting journal entry was
made. The fair value on 1231?2021 is $2,875,000 and the Fair Value adjustment account has a debit balance of
$200,000. What is the adjusting journal entry needed on 1231?2021 to adjust the investments to fair value?
DR Fair Value Adjustment $375,000; CR Unrealized Holding Gain/Loss-Income $375,000
DR Equity Investment $375,000; CR Unrealized Holding Gain/Loss-Income $375,000
DR Unrealized Holding Gain/Loss-Income $375,000; CR Fair Value Adjustment $375,000
DR Fair Value Adjustment $575,000; CR Unrealized Holding Gain/Loss-Income $575,000
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