Ellison Company sells large store-rack systems and frequently accepts notes receivable from customers as payment. Ellison conducts a through credit check on its customers, and it charges a fairly low interest rate (1/2 of 1% payable monthly) on these notes. Ellison has elected to use the fair value option for one of these notes and has the following data related to the carrying and fair value for its note.

Carrying Value Fair Value December 31, 2017 $90,000 $85,000 December 31, 2018 72,000 76,000

Instructions Prepare the journal entry at December 31 (Ellisons year-end) for 2017 and 2018, to record the fair value option for these not