On January 1, 2020, PT XYZ invest in 10 years bond payable with a 10-year term of US$ 500,000. The interest is paid annually. The bonds coupon rate and Effective Interest Rate (EIR) is 6%. PT XYZ classifies the investment as a financial asset at amortized cost. As of December 31, 2020, using the most relevant information PT XYZ make the following estimates:

1.the bond has 12 months probability of default (PD) of 0.5%;

2.the loss given default (LGD)- which is an estimate of the amount of loss if the bond were to default- is 30%; and

3.the lifetime probability of default is 20%.

PT XYZ uses an internal credit rating system of 1 to 10, with 1 denoting the lowest credit risk and 10 denoting the highest credit risk. PT XYZ considers an increase of two grading grades to represent a significant increase in credit risk. It considers grades 3 and lowers to be a low credit risk. The credit rating of the bond payable on December 31, 2020, is 3. Initially, the rating of the bond payable was 2.

Calculate and prepare the journal entry for the impairment of the financial assets. The beginning balance of the allowance for impairment losses is Rp 0.