Fallen Company commonly issues long-term notes payable to its various lenders. Fallen has had a pretty good credit rating such that its effective borrowing rate is quite low (less than 8% on an annual basis). Fallen has elected to use the fair value option for the long-term notes issued to Barclays Bank and has the following data related to the carrying and fair value for these notes.

		Carrying Value		Fair Value
December 31, 2014		$56,590		$56,590
December 31, 2015		46,010		44,700
December 31, 2016		37,710		39,860

(a) Prepare the journal entry at December 31 (Fallens year-end) for 2014, 2015, and 2016, to record the fair value option for these notes. (If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts.Credit account titles are automatically indented when amount is entered. Do not indent manually.)

Date	Account Titles and Explanation	Debit	Credit
Dec. 31, 2014
Dec. 31, 2015
Dec. 31, 2016

(b) At what amount will the note be reported on Fallens 2015 balance sheet?

Note to be reported on Fallens 2015 balance sheet

$

(c) What is the effect of recording the fair value option on these notes on Fallens 2016 income?

The effect of recording the fair value option would result in unrealized holding lossgain of

$