Question
On January 12, 2021, Jefferson Corporation purchased bonds of Rose Corporation for $76 million at par and classified the securities as available-for-sale. On December 31,
On January 12, 2021, Jefferson Corporation purchased bonds of Rose Corporation for $76 million at par and classified the securities as available-for-sale. On December 31, 2021, these bonds were valued at $69 million. Nine months later, on October 3, 2022, Jefferson Corporation sold these bonds for $88 million. As part of the multistep approach to record the 2022 transaction, Jefferson Corporation should next take the second step of:
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Reversing total accumulated unrealized holding gains of $19 million.
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Reversing total accumulated unrealized holding gains of $7 million.
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Reversing total accumulated unrealized holding gains of $12 million.
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Reversing total accumulated unrealized holding gains of $26 million.
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