Adjusting Bonds Payable Under the Fair Value Option Josie Corporation issued 10-year, 8% interest-bearing bonds payable at face value for $16,000 on January 1, 2020. At that time, Josie Corporation elected to account for the bonds payable using the fair value option method. At December 31, 2020, the fair value of the bonds payable was $15,840 due to an increase in Josie Corporation’s borrowing rate because of general market risk.  a. Prepare the journal entry to adjust the bonds payable under the fair value option method on December 31, 2020.  b. How would your answer to (a) change if the decrease in the fair value of bonds payable was instead due to an increase in Josie Corporation’s borrowing rate due to a decline in corporate liquidity?       Date Account Name Dr. Cr. a. Dec. 31, 2020 Answer Answer Answer     Answer Answer Answer b. Dec. 31, 2020 Answer Answer Answer     Answer Answer Answer

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