Newberry purchased XYZ bonds for $100,000 on 1/1/21 and classified them as available-for-sale. The year-end values of these bonds for years 2021-2023 respectively were $102,000, $99,000, and $93,000. Suppose Newberry erroneously accounted for these securities as if they were "Trading" since their purchase.
Net Income for 2023 would be:
a. $6,000 understated
b. $7,000 overstated
c. $9,000 understated
d. $3,000 overstated
e. $5,000 overstated