On January 1, 2020, Wildhorse Corporation purchased a $1,150,000 bond issued by ALN Ltd. The bond was due to mature on December 31, 2022, and paid interest at 6% every June 30 and December 31. The market interest rate was 8%. Wildhorse had both the intention and ability to hold the bond until its maturity date.

On January 1, 2022, Wildhorse became aware that ALN was experiencing severe financial difficulties. After discussing the situation with ALN and some of the other creditors, Wildhorse believed that ALN would now be able to repay only $1,035,000 of the original $1,150,000 bond. (The tables in this problem are to be used as a reference for this problem.)

a) Calculate the purchase price of the bond using A-2 and A-4 Tables, a financial calculator or Excel functions. (Round factor values to 8 decimal places, e.g. 1.25124125 and final answer to 2 decimal places, e.g. 5,275.36.)

Purchase price

$

b) Calculate the carrying amount of the bond on January 1, 2022 by preparing a bond amortizable table. (Round answer to 2 decimal places, e.g. 5,275.36.)

Carrying amount

$

c) Calculate the revised present value of the bond at January 1,2022 using A-2 and A-4 Tables, a financial calculator or Excel functions. (Round factor values to 8 decimal places, e.g. 1.25124125 and final answer to 2 decimal places, e.g. 5,275.36.)

Revised present value

$

d) Prepare the journal entry on Wildhorse’s books to record the impairment of the investment, assuming that Wildhorse follows the incurred loss model. (For calculation purposes, use 5 decimal places as displayed in the factor table provided. Round answers to 2 decimal places, e.g. 52.75. Credit account titles are automatically indented when the amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts.)

Account Titles and Explanation	Debit	Credit
Loss on Impairment
Bond Investment at Amortization Cost