TB MC Qu$.12-85($Static$)$ The Guitar World $($TGW$)$ holds an investment $...$

The Guitar World $($TGW$)$ holds an investment in bonds that increased in fair value over $2024,$ and accounts for that investment as available$-$for$-$sale. When considering taxes, TGW would:

Multiple Choice

reduce accumulated other comprehensive income $($AOCI$)$ for tax expense, and probably increase its deferred tax liability.

recognize tax expense on the income statement, and probably increase its deferred tax liability.

recognize tax expense on the income statement, and probably increase taxes payable.

reduce accumulated other comprehensive income $($AOCI$)$ for tax expense, and probably increase taxes payable.