15 Bloom Corporation purchased $1,400,000 of Taylor Company 5% bonds, at their face amount, with the intent and ability to hold the bonds until they matured in 2025, so Bloom classifies its investment as AFS. Unfortunately, a combination of problems at Taylor Company and in the debt securities market caused the fair value of the Taylor investment to decline to $920,000 during 2021. The following are the two alternative scenarios that should be analyzed independent of each other. 6 nts 1. Bloom now believes it is more likely than not that it will have to sell the Taylor bonds before the bonds have a chance to recover their fair value. Of the $480,000 decline in fair value, Bloom attributes $290,000 to credit losses, and $190,000 to noncredit losses. 2. Bloom does not plan to sell the Taylor bonds prior to maturity, and does not believe it is more likely than not that it will have to sell the Taylor bonds before the bonds have a chance to recover their fair value. Of the $480,000 decline in fair value, Bloom attributes $290,000 to credit losses, and $190,000 to noncredit losses. eBook Required: 1. Prepare appropriate entry(s) at December 31, 2021 and indicate how the scenario will affect the 2021 income statement, OCI, and comprehensive income. 2. Prepare appropriate entry(s) at December 31, 2021. Assume that, at the end of 2020, Bloom had recorded an unrealized loss of $120,000 on the Taylor investment Complete this question by entering your answers in the tabs below. Required 1 G Required 1 Inc Stmt Required 2 Prepare appropriate entry(s) at December 31, 2021. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.) View transaction list Journal entry worksheet Required 1 G Required 1 Inc Stmt Required 2 Prepare appropriate entry(s) at December 31, 2021. (If no entry is required for a transaction/even the first account field.) View transaction list Journal entry worksheet Bloom now believes it is more likely than not that it will have to sell the Taylor bonds before the bonds have a chance to recover their fair value. Of the $480,000 decline in fair value, Bloom attributes $290,000 to credit losses, and $190,000 to noncredit losses. Record the entry to reclassify the unrealized loss recorded in the year 2020. Note: Enter debits before credits. Event General Journal Debit Credit 1b Complete this question by entering your answers in the tabs below. Required 1 G Required 1 Inc Stmt Required 2 Prepare appropriate entry(s) at December 31, 2021. Assume that, at the end of 2020, Bloom had recorded an unrealized loss of $120,000 on the Taylor investment. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.) View transaction list Journal entry worksheet Bloom does not plan to sell the Taylor bonds prior to maturity, and does not believe it is more likely than not that it will have to sell the Taylor bonds before the bonds have a chance to recover their fair value. Of the $480,000 decline in fair value, Bloom attributes $290,000 to credit losses, and $190,000 to noncredit losses. Record the credit losses if the Taylor bonds are not sold. Note: Enter debits before credits. Event General Journal Debit Credit 2a Complete this question by entering your answers in the tabs below. Required 1 G) Required 1 Inc Stmt Required 2 Prepare appropriate entry(s) at December 31, 2021. Assume that, at the end of 2020, Bloom had recorded an unrealized loss of $120,000 on the Taylor investment. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.) View transaction list Journal entry worksheet