Goofy Inc. bought a sizeable amount of Crazy Co.'s bonds for $207,000 on May 5, 2020, and classified the investment as available-for-sale. The market value of the bonds declined to $126,000 by December 31, 2020. Goofy reclassified this investment as trading securities in December of 2021 when the market value had risen to $152,000. What effect on 2021 net income should be reported by Goofy for the Crazy Co. bonds?

Multiple Choice

• $55,000 net unrealized holding loss.

• $81,000 net unrealized holding loss.

• $0.

• $26,000 net unrealized holding gain.