Question: (Fair Value Option) Presented below is selected information related to the financial instruments of Kirkland Company at December 31, 2017. This is Kirkland Company's first

(Fair Value Option) Presented below is selected information related to the financial instruments of Kirkland Company at December 31, 2017. This is Kirkland Company's first year of operations.

Carrying Amount

Fair Value (at December 31) Investment in debt securities (intent is to hold to maturity) $ 60,000 $ 59,000 Investment in Olive Company stock 400,000 430,000 Bonds payable 500,000 490,000

Instructions (a) K irkland elects to use the fair value option whenever possible. Assuming that Kirkland's net income is $360,000 in 2017 before reporting any securities gains or losses, determine Kirkland's net income for 2017. (b)Record the journal entry, if any, necessary at December 31, 2017, to record the fair value option for the bonds payable.

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