Bloom Corporation purchased $\backslash (\backslash$$ $1,250,000\backslash )$ of Taylor Company $\backslash (5\backslash \%\backslash )$ bonds, at thelr face amount, with the intent and ability to hold the bonds untill they matured in $2028,$ so Bloom classifies its Investment as HTM$.$ Unfortunately, a combination of problems at Taylor Company and in the debt securities market caused the fair value of the Taylor investment to decline to $\backslash (\backslash$$ $800,000\backslash )$ during $2024.$ The following are the two alternative scenarlos that should be analyzed independent of each other.

$1.$ Bloom now belleves it is more likely than not that it will have to sell the Taylor bonds before the bonds have a chance to recover their falr value. Of the $\backslash (\backslash$$ $450,000\backslash )$ decline in falr value, Bloom attributes $\backslash (\backslash$$ $275,000\backslash )$ to credit losses, and $\backslash (\backslash$$ $175,000\backslash )$ to noncredit losses.

$2.$ Bloom does not plan to sell the Taylor bonds prior to maturity, and does not belleve 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 $\backslash (\backslash$$ $450,000\backslash )$ decline in fall value, Bloom attributes $\backslash (\backslash$$ $275,000\backslash )$ to credit losses, and $\backslash (\backslash$$ $175,000\backslash )$ to noncredit losses.

Required:

Prepare appropriate entry$($s$)$ at December $31,2024,$ and indicate how the scenarlo will affect the $2024$ income statement $($Ignoring Income taxes$).$

Complete this question by entering your answers in the tabs below.

Income

Statement

Prepare appropriate entry$($s$)$ at December $31,2024.$

Note: If no entry is required for a transaction$/$event$,$ select $"$No journal entry required" in the first account field.

Journal entry worksheet

Record the entry for credit or noncredit losses.

Note: Enter debits before credits. Bloom Corporation purchased $\backslash$$$1,250,000$ of Taylor Company $\backslash (5\backslash \%\backslash )$ bonds, at thelr face amount, with the intent and ability to hold the bonds untll they matured in $2028,$ so Bloom classifies Its Investment as HTM$.$ Unfortunately, a combination of problems at Taylor Company and in the debt securities market caused the fair value of the Taylor investment to decline to $\backslash (\backslash$$ $800,000\backslash )$ during $2024.$ The following are the two alternative scenarlos that should be analyzed independent of each other.

$1.$ Bloom now belleves it is more likely than not that it will have to sell the Taylor bonds before the bonds have a chance to recover their falr value. Of the $\backslash (\backslash$$ $450,000\backslash )$ decline in fair value, Bloom attributes $\backslash (\backslash$$ $275,000\backslash )$ to credit losses, and $\backslash (\backslash$$ $175,000\backslash )$ to noncredit losses.

$2.$ Bloom does not plan to sell the Taylor bonds prior to maturity, and does not belleve 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 $\backslash (\backslash$$ $450,000\backslash )$ decline in falr value, Bloom attributes $\backslash (\backslash$$ $275,000\backslash )$ to credit losses, and $\backslash$$$175,000$ to noncredit losses.

Required:

Prepare appropriate entry$($s$)$ at December $31,2024,$ and indicate how the scenarlo will affect the $2024$ income statement $($Ignoring Income taxes$).$

Complete this question by entering your answers in the tabs below.