Bloom Corporation purchased $1,050,000 of Taylor Company 5% bonds at par and classifies their investment as AFS. Unfortunately, a combination of problems at Taylor Company and in the debt market caused the fair value of the Taylor investment to decline to $640,000 during 2018. Consider each of the following as independent situation. 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 $410,000 decline in fair value, Bloom attributes $255,000 to credit losses, and $155,000 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 $410,000 decline in fair value, Bloom attributes $255,000 to credit losses, and $155,000 to noncredit losses. Required: 1. Prepare appropriate entry(s) at December 31, 2018 and Indicate how the scenario will affect the 2018 income statement, OCI, and comprehensive income. 2. Prepare appropriate entry(s) at December 31, 2018. Assume that, at the end of 2017, Bloom had recorded a temporary unrealized loss (not an OTT impairment) of $102,500 on the Taylor investment. Complete this question by entering your answers in the tabs below Required 1 GiRequired 1 Inc .iusl l ler: 18:yjm.nra. Required 1 G Required 1 Inc IncRequired 2 Stmt Prepare appropriate entry s at December 31 201 and indicate how the scenariowil affect the 2018 nco mesta ement D no entry is required for a transaction/event, select "No journal entry required" in the first account field.) and comprehensive oom View transaction list Journal entry worksheet Record the impairment effect on the 2018 income statement if Taylor bonds are sold Note: Enter debits before credits Event General Journal Debit Credit 01 Prepare appropriate entry(8) at December 31,2018 and Indicate how the scenario will affect the 2018 income statement, OCI, and comprehensive income. (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 2 3 Record the credit losses if Taylor bonds are not sold. Note: Enter debits before credits Event General Journal Debit Credit 2a Prepare appropriate entry(s) at December 31, 2018 and Indicate how the scenario will affect the 2018 income statement, OCI, and comprehensive income. (Ir no entry is required for a transaction/event, select "No journal entry required" in the first account field.) View transaction list Journal entry worksheet 2 3 Record the noncredit losses if Taylor bonds are not sold. Note: Enter debits before credits. Event General Journal Debit Credit 2b View transaction list Journal entry worksheet 2 3 4 Record the credit losses if the Taylor bonds are not sold Notc: Enter debits before crcdits Event General Journal Debit Credit 2a View transaction list Journal entry worksheet 2 3 4 5 Record the entry to adjust the fair value adjustment account to the correct balance. Note: Enter debits before credits. Event General Journal Dehit Credit 2c