FIN Company invests in a number of privately issued bonds. On January 3, 2020, FIN Company invested in a 7% bond issued by S Company at par for $600,000 which would mature on December it 31, 2024. In the worst case scenario of a default event, S Company is not expected to be able to pay interest in 2023 and 2024 and the principal payment due on December 31, 2024. However, existing cash reserves are sufficient to pay interest due in 2020, 2021, and 2022. On January 3, 2020, the credit quality of S Company was good and the probability of default during the first 12 months to December 31, 2020, was 0.5%. The probability remained stable throughout the period. Ignore discounting.

a. What stage of impairment loss would best describe the state of S Company bonds during 2020? b. What is the loss allowance at December 31, 2020?

On December 31, 2021, the credit quality of S Co deteriorated significantly due to poor market conditions but S Co did not default on the interest payment. The probability of default during the next 12 months to December 31, 2022 was 5% and the probability of default during the remaining lifetime to December 31, 2024 was 25%. Apply discounting at 7%.

d. What stage of impairment loss would best describe the state of S Company bonds during 2021? e. What is the loss allowance at December 31, 2021? f. What is the interest revenue to be reported for 2021?

On Dec. 31, 2023, S Co defaulted on the interest payment due on this date. S Co is highly unlikely to be able to pay the interest for the remaining periods and the principla at maturity date. The probability of default on remaining payment was assed at 90%. Apply discounting at 7%.

g. What stage of impairment loss would best describe the State of S Company during 2022? h. What is the loss allowance at Dec. 31, 2022? i. What is the interest revenue to be reported for 2022?

Kindly answer in good accounting format.