Bloom Corporation purchased $1,750,000 of Taylor Company 5% bonds at par with the intent and ability to hold the bonds until they matured in 2025, so Bloom classifies their investment as HTM. Unfortunately, a combination of problems at Taylor Company and in the debt market caused the fair value of the Taylor investment to decline to $1,200,000 during 2018. Consider each of the following as an 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 $550,000 decline in fair value, Bloom attributes $325,000 to credit losses, and $225,000 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 $550,000 decline in fair value, Bloom attributes $325,000 to credit losses, and $225,000 to noncredit losses Required: (lgnore income taxes.) Prepare appropriate entry(s) at December 31, 2018, and indicate how the scenario will affect the 2018 income statement Complete this question by entering your answers in the tabs below. General Journal Income Statement Prepare appropriate entry(s) at December 31,2018. (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 impairment effect on the 2018 income statement if Taylor bonds are sold Note: Enter debits before credits. Debit Credit Event General Journal 01 View transaction list Journal entry worksheet 2 Record the credit losses if Taylor bonds are not sold. Note: Enter debits before credits. Event General Journal Debit Credit 2a View transaction list Journal entry worksheet 3 Record the non credit losses if Taylor bonds are not sold Note: Enter debits before credits Event General Journal Debit Credit 2b Complete this question by entering your answers in the tabs below. General JournalIncome Statement Indicate how the scenario will affect the 2018 income statement. (Amounts to be deducted should be indicated with a minus sign.) Scenario1 Scenario 2 Effect Effect Income statement