Grant Corp. has elected to use the fair value option for long-term notes it issues to finance portions of its business. At December 31, 2020 the unadjusted carrying value of Grant Corp's long-term notes payable was $375,000. The fair value of the notes was $405,000. The difference was due to chantges in market interest rates, not credit risk. Which of the following is the correct journal entry to adjust the notes to fair value?

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