Bloom Corporation purchased $1.700,000 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 $1160,000 during 2021. The following are the two alternative scenarios that should be analyzed independent of each other 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 $540.000 decline in fair value, Bloom attributes $320,000 to credit losses, and $220,000 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 $540,000 decline in fair value, Bloom attributes $320,000 to credit losses, and $220,000 to noncredit losses. 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 $135,000 on the Taylor investment. Required 1 G Required 1 Inc Required 2 Stint 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 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 $540,000 decline in fair value, Bloom attributes $320,000 to credit losses, and $220,000 to noncredit losses Record the credit losses if Tavlor bonds are not sold Note: Enter debits before credits Event General Journal Debit Credit 2a Record entry Clear entry View general journal Required 1 G Required 1 Inc Strnt 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 GJ Required 1 Inc Required 2 Stmt Prepare appropriate entry(s) at December 31, 2021. Assume that, at the end of 2020, Bloom had recorded an unrealized loss of $135,000 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 set 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 $540,000 decline in fair value, Bloom attributes $320,000 to credit losses, and $220,000 to noncredit losses. Record the credit losses if the Taylor bonds are not sold. Note: Enter debits before credits General Journal Event Debit Credit 2a Required 1 G) Required 1 Inc Required 2 Stmt Prepare appropriate entry(s) at December 31, 2021. Assume that, at the end of 2020, Bloom had recorded an unrealized loss of $135,000 on the Taylor investment. (If no entry is required for a transaction/event, select "No joumal entry required" in the first account field.) View transaction list Journal entry worksheet