I have a question about this problems.

Culver Company loans Sarasota Company $2,190,000 at 6% for 3 years on January 1, 2017. Culver intends to hold this loan to maturity. The fair value of the loan at the end of each reporting period is as follows.

December 31, 2017$2,239,000December 31, 20182,209,000December 31, 20192,190,000

Prepare the journal entry(ies) at December 31, 2017, and December 31, 2019, for Culver related to these bonds, assuming (a) it does not use the fair value option, and (b) it uses the fair value option. Interest is paid on January 1

I thought the answer for a) is

Dec 31, 2017 Debt investment 2,239,000

Cash 2,239,000

Dec 31, 2019

Fair Value Adjustment 49,000

Unrealized holding gain or loss-equity 49,000

However, it was wrong.

The question for b, my answer was correct except bold writing:

b)

Dec 31, 2017

Interest receivable 131,400

Interest Revenue 131, 400

Debt investments 49,000

Unrealized holding gain or loss-income 49,000

Dec 31, 2019

Interest receivable 131, 400

Interest revenue 131, 400

Debt investment 19,000

Unrealized holding gain or loss 19,000

This accounting title was wrong, I don't know why.

Also, I don't know what is the difference between using fair value option or not.

Please help me.

Thank you so much!