What is the asset adjustment to a bank's balance sheet if the bank sold a five-year, 7 percent annual coupon $100,000 bond acquired at par, but now yielding 8 percent? The bond was not in the mark-to-market portfolio.

A. A $96,007 reduction in assets.
B. A $96,007 increase in assets.
C. A $100,000 reduction in assets.
D. A $100,000 increase in assets.
E. A $100,000 increase in liabilities.

Ans: C. A $100,000 reduction in assets.