On January $1^{st},2021$ Oregon Inc. purchased $$10,000$ of Orange Inc.$\text{'}$s $6\%,10$ year bonds for

$$10,772\mathrm{.}14.$ The market rate is $5\%$ and the investment is classified as available for sale. On December

${31}^{st},2021$ the bonds are trading at $$10,700.$ After interest revenue has been recorded what is the journal

entry needed by Oregon Inc. on December ${31}^{st}$ to record the adjustment to fair value assuming the Fair

Value Adjustment account has a $$0$ balance?

A$.$ DR Fair Value Adjustment $$10\mathrm{.}75$; CR Unrealized Gain$/$Loss$-$Equity $$10\mathrm{.}75$

B$.$ DR Unrealized Gain$/$Loss $-$ Equity $$10\mathrm{.}75$; CR Fair Value Adjustment $$10\mathrm{.}75$

C$.$ DR Fair Value Adjustment $$72\mathrm{.}14$; CR Unrealized Gain$/$Loss$-$Income $$72\mathrm{.}14$

D$.$ DR Unrealized Gain$/$Loss$-$Equity $$72\mathrm{.}14$; CR Fair Value Adjustment $$72\mathrm{.}1$

Why is option B the right answer?