XYZ Imports has three securities in its available-for-sale investment portfolio. Information about these securities is as follows:

Market Value
Security	Cost	12/31/Year 1	12/31/Year 2
NCB	$ 78,000	$ 93,600	$ 100,000
TRR	$ 117,000	$ 120,000	$ 0
Enson	$ 58,500	$ 53,000	$ 50,700

TRR was sold in Year 2 for $127,400.

Which of the following statements is correct?

1. On its 12/31/Year 2 balance sheet, Deutsch should report the NCB stock at its fair value of $100,000.
2. On its 12/31/Year 2 balance sheet, Deutsch should report an unrealized holding gain on the NCB stock of$22,000 in stockholders equity.
3. On its income statement for the year ending December 31, Year 2, Deutsch should report an unrealized holding gain on the NCB stock of $22,000.