1. Which one of the following statement is FALSE?
   1. At the inception of each new debt, a company must choose where to report fair values of that new debt, either in the balance sheet or in the notes
   2. For modified debt terms, if the total (undiscounted) restructured future cash flows are greater than the book value of the debt, the book value is not adjusted
   3. A company is not allowed to report the fair value of some debt on the balance sheet and the fair value of the remaining debt in the notes
   4. If a noncash asset is transferred to a creditor to settle debt, the noncash asset must be adjusted to fair value prior to the transfer, with the resulting gain or loss reported in income