XYZ Investments bought 2,000 shares of Company X's common stock on January 1, Year 4, for $10,000 and 2,000 shares of Company Y's common stock on July, Year 4, for $12,000. At the end of Year 4, the market value of the X stock was $14,000 and the market value of the Y stock was $15,000. The stocks were held for their long-term investments potential. XYZ owns 8% of X and 12% of Y. The year end mark to market adjustments made by XYZ Investments should include a debit/credit to income/equity account for unrealized holding loss/gain? I came up with debit, equity, gain.

I think it would help if you could identify the entry you would make for this. Hint - 2 of your answers are correct.

Should it be a loss?

What would your entry be? That will give you the answer.

DEBIT market adjustment - available for sales securities
CREDIT unrealized change in value - available for sales securities (equity)

Right. Do you understand the original question now?

Credit, equity, gain

Right.