Michek Company loans Sarasota Company $2,000,000 at 6% for 3
years on January 1, 2017. Michek intends to hold this loan to
maturity. The fair value of the loan at the end of each reporting
is as follows. December 31, 2017 $2,050,000 December 31, 2018
2,020,000 December 31, 2019 2,000,000 Prepare the journal entry
(ies) at December 31, 2017, and December 31, 2019, for Michek
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.
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