Use the following information to answer the questions below:

On January 1, Y1, XYZ bought a $80,000, 8%, 5-year bond of D Corp. The effective interest rate was 6%. Interest is payable on June 30and December 31.

At December 31, Y1, the market value of the bonds was $88,000. At December 31, Y2, the market value of the bonds was $86,000.

As of December 31, Y2, determine the balance sheet presentation of the investment. Assume the investment was classified as either a trading security or available-for-sale security:

Investment:

$_______

Investment Security Fair Value Adjustment (use parentheses to indicate a decrease if applicable):

$_________

Net Investment:

$_______

Determine the impact on Y2 Net Income, assuming the security was classified as an available-for-sale security. Use parentheses to indicate a net decrease if applicable.

$_______

Determine the impact on Y2 Total Stockholder's Equity, assuming the security was classified as an available-for-sale security. Use parentheses to indicate a net decrease if applicable.

$_____

Determine the impact on Y2 Net Income, assuming the security was classified as a trading security. Use parentheses to indicate a net decrease if applicable.

$_______

Determine the impact on Y2 Total Stockholder's Equity, assuming the security was classified as a trading security. Use parentheses to indicate a net decrease if applicable.

$_________