Blue Corporation has municipal bonds classified as a held-to-maturity at December 31, 2025. These bonds have a par value of $865,000, an amortized cost of $865,000, and a fair value of $780,000. The company believes that impairment accounting is now appropriate for these bonds. (a) Prepare the journal entry to recognize the impairment. (List debit entry before credit entry. Credit account titles are automatically indented when amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter O for the
Blue Corporation has municipal bonds classified as a held-to-maturity at December 31, 2025. These bonds have a par value of $865,000, an amortized cost of $865,000, and a fair value of $780,000. The company believes that impairment accounting is now appropriate for these bonds. (a) Prepare the journal entry to recognize the impairment. (List debit entry before credit entry. Credit account titles are automatically indented when amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter O for the
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Transcribed Image Text:Blue Corporation has municipal bonds classified as a held-to-maturity at December 31, 2025. These bonds have a par value of
$865,000, an amortized cost of $865,000, and a fair value of $780,000. The company believes that impairment accounting is now
appropriate for these bonds.
(a)
Prepare the journal entry to recognize the impairment. (List debit entry before credit entry. Credit account titles are automatically
indented when amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter O for the
amounts.)
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