Melia Company purchased a debt investment in 2020 and classified it as held to maturity. The carrying value on December 31, 2020, is $250,000. At December 31, 2020, the fair value of the investment is $238,000, and the present value of the future cash flows from the debt investment is $241,000. Melia does not intend to sell the investment, but it does deem it more likely than not that it will have to sell the investment before the market recovers.

Required

a. If there is an impairment, what amount of loss will Melia report in net income? What amount of loss will Melia report in other comprehensive income?

b. Prepare the journal entry for the impairment loss if needed.