Ellison Company sells large store-rack systems and frequently accepts notes receivable from customers as payment. Ellison conducts a thorough credit c heck 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.

Prepare the journal entry at December 31 (Ellison's year-end) for 2017 and 2018, to record the fair value option for these notes. (Credit account titles are automatically indented when the amount is entered. Do not indent manually. Record journal entries in the order presented in the problem.)


Account Titles and Explanation





Carrying Value


Fair Value

December 31, 2017







December 31, 2018









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