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:

The desired ending balance of the Fair Value Adjustment account at 12/31/2018 equals

a. $120,000 debit.

b. $40,000 credit.

c. $40,000 debit.

d. $120,000 credit.

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