Question
On June 30, 2019, AlphaCo acquired a 15% interest in BetaCo (a public company) for $10,000,000 and received no special rights. On September 30, 2019,
On June 30, 2019, AlphaCo acquired a 15% interest in BetaCo (a public company) for $10,000,000 and received no special rights. On September 30, 2019, a new investor invested at a higher price indicating that the value of this investment had increased to $12,000,000. By December 31, 2019, the value of the investment in BetaCo had declined to $8,500,000. This decline in value was believed to be a result of an other than temporary situation. What gain or loss should be recorded by AlphaCo in its income statement for the 4th quarter of 2019 related to this transaction:
| A. | Zero gain or loss |
| B. | $2,000,000 gain |
| C. | $1,500,000 loss |
| D. | $3,500,000 loss |
| E. | None of the above |
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