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Current Attempt in Progress

In $20$X$1,$ K$-$Co$.$ issues bonds with a face amount of $\backslash$$$3,000,000$ at a discount. K$-$Co$.$ elects to report the liability using the fair value option If the fair value of the liability is less than the carrying value at a reporting date, the entry to adjust the bonds to fair value will include a

credit to Unrealized Holding Gain or Loss$-$Income.

credit to Interest Expense.

credit to Bonds Payable.

debit to Unrealized Holding Gain or Loss$-$ Equity.