Wang Corporation purchased $100,000 of Hales Inc.6% bonds at par with the intent and ability to hold the bonds until they matured in 2020,so Wang classifies its investment as held to maturity.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 2016.Wang views this decline as an other-than-temporary (OTT)impairment.Wang 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 Wang accounts for the Hales bonds under IAS No.39,before-tax net income for 2016 will be reduced by:

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The Answer of Wang Corporation purchased $100,000 of Hales Inc.6% bonds at par with the intent and ability to hold the bonds until they matured in 2020,so Wang classifies its investment as held to maturity.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 2016.Wang views this decline as an other-than-temporary (OTT)impairment.Wang 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 Wang accounts for the Hales bonds under IAS No.39,before-tax net income for 2016 will be reduced by:

Wang Corporation Purchased $100,000 of Hales Inc