On January 1, 2018, Richard Corporation issued $800,000 of its 6% bonds for $743,154. The bonds were priced to yield 7%. The bonds are dated January 1, 2018, and mature on December 31, 2027. Interest is payable semiannually on June 30 and December 31. Richard Corp. determines interest at the effective rate and elected the option to report these bonds at their fair value. On December 31, 2018, the fair value of the bonds was $745,000 as determined by their market value in the over-the-counter market. Richard determined that all of the decrease in fair value was due to an increase in general interest rates. Richard’ earnings for the year will include:

a) Gain from change in the fair value of debt of 2,245

b) Loss from change in the fair value of debt of 2,467

c) Loss from change in the fair value of debt of 2,595