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Indigo Company has a 12% note payable with a carrying value of $16,000. Indigo applies the fair value option to this note. Gi

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Answer #1
Accounts Titles and Explanation Debit Credit
No Entry
No Entry
Unrealized holding gain or loss - equity $2,180
Note Payable $2,180
($18,180 - $16,000)
Note: If the fair value change was due to non-credit risk factor
(market interest rates), any gain or loss is recorded in income.
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