Tanner-UNF Corporation acquired as a long-term investment $240 million of 6% bonds, dated July 1, on July 1, 2024. Companymanagement has the positive intent and ability to hold the bonds until maturity. The market interest rate (yield) was 8% for bonds ofsimilar risk and maturity. Tanner-UNF paid $200 million for the bonds. The company will receive interest semiannually on June 30 andDecember 31. As a result of changing market conditions, the fair value of the bonds at December 31, 2024, was $210 million.Required:1. & 2. Prepare the journal entry to record Tanner-UNF's investment in the bonds on July 1, 2024 and interest on December 31, 2024,at the effective (market) rate.3. At what amount will Tanner-UNF report its investment in the December 31, 2024, balance sheet?4. Suppose Moody's bond rating agency downgraded the risk rating of the bonds motivating Tanner-UNF to sell the investment onJanuary 2, 2025, for $190 million. Prepare the journal entry to record the sale.Complete this question by entering your answers in the tabs below.Req 1 and 2Prepare the journal entry to record Tanner-UNF's investment in the bonds on July 1, 2024 and interest on December 31, 2024, at theeffective (market) rate.Note: If no entry is required for a transaction/event, select "No journal entry required" in the first account field. Do not roundintermediate calculations. Enter your answers in millions rounded to 1 decimal place, (.e., 5,500,000 should be entered as 5.5).Show less AView transaction listReq 3Journal entry worksheet1Record Tanner-UNF's investment in the bonds on July 1, 2024.Note: Enter debits before credits.Date,Req 1 and 2vestment2Req 4un journey wie erns vesunene onus on July 1, 2024 aru merest on December 31, 2024,at the effective (market) rate.3. At what amount will Tanner-UNF report its investment in the December 31, 2024, balance sheet?4. Suppose Moody's bond rating agency downgraded the risk rating of the bonds motivating Tanner-UNF to sell the investment onJanuary 2, 2025, for $190 million. Prepare the journal entry to record the sale.Complete this question by entering your answers in the tabs below.Req 3Req 1 and 2At what amount will Tanner-UNF report its investment in the December 31, 2024, balance sheet?Note: Enter your answer in millions rounded to 1 decimal place, (i.e., 5,500,000 should be entered as 5.5). Do not roundintermediate calculations.million< 1General JournalReg 3View transaction listReq 4January 2, 2025, for $190 million. Prepare the journal entry to record the sale.DebitComplete this question by entering your answers in the tabs below.Record the sale.Credit< Req 1 and 2ReqSuppose Moody's bond rating agency downgraded the risk rating of the bonds motivating Tanner-UNF to sell the investment on January2, 2025, for $190 million. Prepare the journal entry to record the sale.Note: If no entry is required for a transaction/event, select "No journal entry required" in the first account field. Do not roundintermediate calculations. Enter your answers in millions rounded to 1 decimal place, (i.e., 5,500,000 should be entered as 5.5).Show less AJournal entry worksheetNote: Enter debits before credits.Reg 4 >>

Bond :— Bonds are also known as fixed income instruments & are used by governments or companies…

Tanner-UNF Corporation acquired as a long-term investment $240 million of 6% bonds, dated July 1, on July 1, 2024. Company management has the positive intent and ability to hold the bonds until maturity. The market Interest rate (yield) was 8% for bonds of similar risk and maturity. Tanner-UNF paid $200 million for the bonds. The company will receive interest semiannually on June 30 and December 31. As a result of changing market conditions, the fair value of the bonds at December 31, 2024, was $210 million. Required: 1. & 2. Prepare the journal entry to record Tanner-UNF's investment in the bonds on July 1, 2024 and interest on December 31, 2024, at the effective (market) rate. 3. At what amount will Tanner-UNF report its investment in the December 31, 2024, balance sheet? 4. Suppose Moody's bond rating agency downgraded the risk rating of the bonds motivating Tanner-UNF to sell the investment on January 2, 2025, for $190 million. Prepare the journal entry to record the sale.

Tanner-UNF Corporation acquired as a long-term investment $240 million of 6% bonds, dated July 1, on July 1, 2024. Company management has the positive intent and ability to hold the bonds until maturity. The market Interest rate (yield) was 8% for bonds of similar risk and maturity. Tanner-UNF paid $200 million for the bonds. The company will receive interest semiannually on June 30 and December 31. As a result of changing market conditions, the fair value of the bonds at December 31, 2024, was $210 million. Required: 1. & 2. Prepare the journal entry to record Tanner-UNF's investment in the bonds on July 1, 2024 and interest on December 31, 2024, at the effective (market) rate. 3. At what amount will Tanner-UNF report its investment in the December 31, 2024, balance sheet? 4. Suppose Moody's bond rating agency downgraded the risk rating of the bonds motivating Tanner-UNF to sell the investment on January 2, 2025, for $190 million. Prepare the journal entry to record the sale.

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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