On July $1,20$X$1,$ San Francisco Company issued $$5,000,000$ of $5-$year, $6\%$ bonds. On the same day, San Francisco hedged the risk of a decline in interest rates by entering into a $5-$year interest rate swap contract. At the end of $20$X$1,$ market interest rates have declined substantially. A market appraisal indicates that the value of the interest rate swap is $$240,000$ at December $31,20$X$1.$ What entry, if any, should San Francisco make at that date to record the increase in value?

Debit Swap Contract, $$24,000$; Credit Interest Expense, $$24,000$

No entry is$,$ made because the swap contract is not recorded on San Francisco's books.

Debit Swap Contract, $$240,000$; Credit Unrealized Holding Gain or Loss $-$ Equity, $$240,000$

Debit Swap Contract, $$240,000$; Credit Unrealized Holding Gain or Loss $-$ Income, $$240,000$