Melia Company holds a held- to- maturity debt investment at amortized cost of $ 250,000. At December 31, 2014, the fair value of the investment is $ 238,000 and the present value of the future cash flows from the debt investment is $ 241,000. Melia does not intend on selling the investment, but it does deem the investment, but it does deem it more likely than not that it will have to sell the investment before the market recovers.

Required
a. Does impairment exist? If so, is it other than temporary?
b. I f there is an impairment, what amount of loss will Melia report in net income? What amount of loss will Melia report in other comprehensive income?
c. Prepare the journal entry for the impairment loss, if needed.