Business, 24.12.2019 02:31, NeonPlaySword

Espana corporation purchased $100,000 of hales inc. 6% bonds at par and classifies its investment as available for sale. unfortunately, a combination of problems at hales and in the debt market caused the fair value of the hales investment to decline to $70,000 during 2018. espana views this decline as an other-than-temporary impairment. espana calculates that, of the $30,000 drop in fair value, $10,000 of it relates to credit losses and $20,000 relates to non-credit losses. if espana accounts for the hales bonds under ias no. 39, before-tax net income for 2018 will be reduced by

a.$20,000.
b. $10,000.
c. $0.
d. $30,000.

Answers: 2

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Espana corporation purchased $100,000 of hales inc. 6% bonds at par and classifies its investment as...