LED Corporation owns $$2,700,000$ of Branch Pharmaceuticals bonds and classifies its investment as securities held$-$to$-$maturity. The market price of Branch's bonds fell by $$1,404,000$ due to concerns about one of the company's principal drugs. The concerns were justified when the FDA banned the drug. LED views $$660,000$ of the $$1,404,000$ loss as related to credit losses, and the other $$744,000$ as noncredit losses. LED thinks it is more likely than not that it will have to sell the investment before fair value recovers.

What journal entries should LED record to account for any credit or noncredit losses in the current period? How should the decline affect net income and comprehensive income?

Answer is not complete.

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

General

Journal

Effect

IIII

What journal entries should LED record to account for any credit or noncredit losses in the current period?

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

$\backslash$table$[[$No$,$Transaction,Genera,,Debit,Credit$],[1,1,$Credit loss expense,$(,660,000vv,],[,$Allowance for credit losses,$(,,660,000]]$

LED Corporation owns $$2,700,000$ of Branch Pharmaceuticals bonds and classifies its investment as securities held$-$to$-$maturity. The market price of Branch's bonds fell by $$1,404,000$ due to concerns about one of the company's principal drugs. The concerns were justified when the FDA banned the drug. LED views $$660,000$ of the $$1,404,000$ loss as related to credit losses, and the other

$2\mathrm{.}5$

$$744,000$ as noncredit losses. LED thinks it is more likely than not that it will have to sell the investment before fair value recovers.

points

What journal entries should LED record to account for any credit or noncredit losses in the current period? How should the decline affect net income and comprehensive income?

Answer is not complete.

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

Gerimral

Journal

Effect

How should the decline affect net income and comprehensive income?

Note: Negative amounts should be entered with minus sign.

$\backslash$table$[[,,$Effect$],[$Net income,$$,660,000$