On January 2, 2023, Bloom Corporation purchased $1,000,000 of Taylor Company 5% bonds, at their face...

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On January 2, 2023, Bloom Corporation purchased $1,000,000 of Taylor Company 5% bonds, at their face amount, with neither the intent nor the ability to hold the bonds until they matured in 2028, so Bloom classifies its investment as AFS. At December 31, 2023 the bond had a fair value of $900,000. 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 $600,000 during 2024. 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 $400,000 decline in fair value, Bloom attributes $250,000 to credit losses, and $150,000 to noncredit losses. Required: A Prepare the 2023 journal entries (if necessary) to record: Bloom's investment in the bonds in 2023 Interest on December 31, 2023, at the effective (market) rate. Fair value adjustment at year end B Prepare appropriate entries at December 31, 2024 (if necessary) to record: Interest on December 31, 2024, at the effective (market) rate. Impairment at year end C Report its investment in the December 31, 2024, financial statements Remember to include any effect on the 2024 income, other comprehensive income, comprehensive income, the investment accumulated other comprehensive income. On January 2, 2023, Bloom Corporation purchased $1,000,000 of Taylor Company 5% bonds, at their face amount, with neither the intent nor the ability to hold the bonds until they matured in 2028, so Bloom classifies its investment as AFS. At December 31, 2023 the bond had a fair value of $900,000. 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 $600,000 during 2024. 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 $400,000 decline in fair value, Bloom attributes $250,000 to credit losses, and $150,000 to noncredit losses. Required: A Prepare the 2023 journal entries (if necessary) to record: Bloom's investment in the bonds in 2023 Interest on December 31, 2023, at the effective (market) rate. Fair value adjustment at year end B Prepare appropriate entries at December 31, 2024 (if necessary) to record: Interest on December 31, 2024, at the effective (market) rate. Impairment at year end C Report its investment in the December 31, 2024, financial statements Remember to include any effect on the 2024 income, other comprehensive income, comprehensive income, the investment accumulated other comprehensive income.