Assume the same facts as for Question 1 above. The fair value of the investment in Company E is $220,000 on December 31, 2015. Answer the following questions assuming the investment is recorded using...

Assume the same facts as for Question 1 above. The fair value of the investment in Company E is $220,000 on December 31, 2015. Answer the following questions assuming the investment is recorded using the fair value option:

a. What is Company R’s investment income for 2015?

b. What is Company R’s investment balance on December 31, 2015?

c. Explain in words the investment balance on December 31, 2015.