Presented below is selected information related to the financial instruments of Dawson Company at December $31,2025.$ This is

Dawson Company's first year of operations.

$($a$)$ Dawson elects to use the fair value option for these investments. Assuming that Dawson's net income is $$100,000$ in $2025$ before

reporting any securities gains or losses, determine Dawson's net income for $2025.$ Assume that the difference between the carrying

value and fair value is due to credit deterioration.

Dawson's net income for $2025$ $

$($b$)$ Record the journal entry, if any, necessary at December $31,2025,$ to record the fair value option for the bonds payable. $($List debit

entry before credit entry. Credit account titles are automatically indented when amount is entered. Do not indent manually. If no entry is

required, select $"$No Entry" for the account titles and enter $0$ for the amounts.$)$

Date

Account Titles and Explanation

Debit

Credit

Dec. $31,2025$