On December 31, 2024, Sparrow Company has bonds with an amortized cost of $424,000 and a fair value of $452,000. These bonds are properly classified as trading debt securities. On January 12, 2025, Sparrow sells the bonds for $450,000. Just prior to recording the sale on January 12, 2025, the journal entry to update the fair value adjustment account will include

Multiple choice question:

a credit to fair value adjustment $2,000

a debit to fair value adjustment $28,000

a credit to unrealized holding gain - net income 2,000

a debit to unrealized holding loss-other comprehensive income $28,000