On its December 31, 2017 balance sheet, Calhoun Company appropriately reported a $40,000 debit balance in its Fair Value Adjustment (available-for-sale) account. There was no change during 2018 in the composition of Calhoun's portfolio of equity investments held as available-for-sale securities. The following information pertains to that portfolio:

How should the 2018 unrealized gain/(loss) on these debt securities should be included in Calhoun's 2018 financial statements?

a. $40,000 unrealized gain reported in Net Income.

b. $120,000 unrealized (loss) reported in Net Income.

c. $120,000 unrealized (loss) reported in Other Comprehensive Income (Equity).

d. $160,000 unrealized (loss) reported in Other Comprehensive Income (Equity).

Bond Investment Original Cost Fair value at 12/31/17 Fair value at 12/31/18 Xenon Corporation 260,000 280,000 260,000 Yttrium Company 200,000 220,000 200,000 Zinc Incorporated 350,000 350,000 230,000 $810.000 $850,000 $690,000