Larkspur Company loans Tamarisk Company $2,110,000 at 6% for 3 years on January 1, 2025. Larkspur intends to hold this loan to maturity and has the financial ability to do so. The fair value of the loan at the end of each reporting period is as follows.

December 31, 2025		$2,161,000
December 31, 2026		2,130,000
December 31, 2027		2,110,000

Prepare the journal entries at December 31, 2025, and December 31, 2027, for Larkspur 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. (List all debit entries before credit entries. Credit account titles are automatically indented when amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts. Record journal entries in the order presented in the problem.)

No.	Date	Account Titles and Explanation	Debit	Credit
(a)	choose a transaction date Dec. 31, 2025Dec. 31, 2026Dec. 31, 2027	enter an account title	enter a debit amount	enter a credit amount
		enter an account title	enter a debit amount	enter a credit amount
	choose a transaction date Dec. 31, 2025Dec. 31, 2026Dec. 31, 2027	enter an account title	enter a debit amount	enter a credit amount
		enter an account title	enter a debit amount	enter a credit amount

No.	Date	Account Titles and Explanation	Debit	Credit
(b)	choose a transaction date Dec. 31, 2025Dec. 31, 2026Dec. 31, 2027	enter an account title to record interest revenue	enter a debit amount	enter a credit amount
		enter an account title to record interest revenue	enter a debit amount	enter a credit amount
		(To record interest revenue)
	choose a transaction date Dec. 31, 2025Dec. 31, 2026Dec. 31, 2027	enter an account title to record fair value adjustment	enter a debit amount	enter a credit amount
		enter an account title to record fair value adjustment	enter a debit amount	enter a credit amount
		(To record fair value adjustment)
	choose a transaction date Dec. 31, 2025Dec. 31, 2026Dec. 31, 2027	enter an account title to record interest revenue	enter a debit amount	enter a credit amount
		enter an account title to record interest revenue	enter a debit amount	enter a credit amount
		(To record interest revenue)
	choose a transaction date Dec. 31, 2025Dec. 31, 2026Dec. 31, 2027	enter an account title to record fair value adjustment	enter a debit amount	enter a credit amount
		enter an account title to record fair value adjustment	enter a debit amount	enter a credit amount
		(To record fair value adjustment)