Answer:
c. credit to Unrealized Holding Gain or Loss⎯Income for $210,000.
Explanation:
We know that the notes receivable have a debit balance as it is shown on the assets side under the balance sheet.
Since the fair value of the notes receivable is $920,000 and its carrying value is $710,000 so, the difference would be $210,000 ($920,000 - $710,000) as in the given question, it is said that the fair value option is to be used. So, we take the difference of both the amounts.
Moreover, the notes receivable balance is increased by $210,000 so we debited it and credit the Unrealized Holding Gain or Loss⎯Income
And, the journal entry would be
Notes receivable A/c Dr $210,000
To unrealized holding gain or loss - income $210,000
(Being gain or loss adjusted)
