On December 31, 2016, Blackberry borrows $900 million, a promissory note issued by a consortium of banks. The consortium transfers $867.331 million (rounded) to Blackberry, implying that the bank expects a 4% return on the note, which carries a 3% interest once a year and matures in four years.

a. Using the effective interest method, complete the template below to show the financial statement effects of (1) the December 31, 2016, issue (already shown for you below as an example); (2) the December 31, 2017, interest payment and interest expense accrual; and (3) the December 31, 2018, interest payment and interest accrual.

b. Assume that events involving foreign operations have increased the risk of Blackberry to the point where creditors expect a 5 percent return on the note as of December 31, 2018. What amounts would Blackberry report for long-term debt (1) on the face of its December 31, 2018 balance sheet and (2) in the notes to the financial statements?

c. In addition to the information in Part b, assume that Blackberry has chosen the fair value option for the reporting of this note. What amounts would Blackberry report for long-term debt (1) on the face of its December 31, 2018 balance sheet and (2) and on the income statement with respect to the note's fair value change?