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If a bond's market value drops from $1,000 to $950 after one year, and the bond investor classifies the bond as Available-for-Sale , then the
If a bond'smarket valuedrops from $1,000 to $950 after one year, and the bond investor classifies the bond asAvailable-for-Sale, then the effect of this change on the bondholder's (i.e., lender's) accounting equation is:
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Decrease an asset by $950; decrease owners' equity by $950
Decrease an asset by $50; decrease owners' equity by $50
increase an asset by $50; decrease owners' equity by $50
increase an asset by $950; decrease owners' equity by $950
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