1. Assume that Grouper Inc, invests in a bond for $85,000. The bond was purchased at par and is accounted for using amortized cost. At year end, management has determined that there is no significant increpse in credit risk, but that there is a 4% chance that the company will not collect 18% of the face value of the bond (which also ritbresents the present value of the bond) in the next 12 months. The expected loss model is used.

find out about debit and credit.