1. You have granted an unsecured loan to a company. This loan will be paid off by a single payment of $100 million. The company has a 3% chance of defaulting over the life of the transaction and your calculations indicate that if it defaults you would recover 70% of your loan from the bankruptcy courts. If you are required to hold a credit reserve equal to your expected credit loss, how great a reserve should you hold

On july 2, year 4, wynn, inc., purchased as a short-term investment a $1 million face-value kean co. 8% bond for $910,000 plus accrued interest to yield 10%. the bonds mature on january 1, year 11, and pay interest annually on january 1. on december 31, year 4, the bonds had a fair value of $945,000. on february 13, year 5, wynn sold the bonds for $920,000. in its december 31, year 4, balance sheet, what amount should wynn report for the bond if it is classified as an available-for-sale security?