Tanner-UNF Corporation acquired as a long-term investment $180 million of 7.0% 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 9% for bonds ofsimilar risk and maturity. Tanner-UNF paid $160.0 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 $160.0 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, athe 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 $130.0 million. Prepare the journal entry to record the sale.Complete this question by entering your answers in the tabs below.Req 1 and 2No1Prepare 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.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 as5.5).2Req 3DateJuly 01, 2024> Answer is complete but not entirely correct.Req 4Investment in bondsDecember 31, 2024 CashGeneral JournalCashDiscount on bond investmentDiscount on bond investmentInterest revenue< Req 1 and 2Req 3 >✓Debit180.06.31.8 XCredit160.020.0Show less8.1 x

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Tanner-UNF Corporation acquired as a long-term investment $180 million of 7.0% 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 9% for bonds of similar risk and maturity. Tanner-UNF paid $160.0 million for the bonds. The company will receive interest semiannually on June 30 ar December 31. As a result of changing market conditions, the fair value of the bonds at December 31, 2024, was $160.0 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, the effective (market) rate. 3. At what amount will Tanner-UNF report its investment in the December 31, 2024, balance sheet?

Tanner-UNF Corporation acquired as a long-term investment $180 million of 7.0% 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 9% for bonds of similar risk and maturity. Tanner-UNF paid $160.0 million for the bonds. The company will receive interest semiannually on June 30 ar December 31. As a result of changing market conditions, the fair value of the bonds at December 31, 2024, was $160.0 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, the effective (market) rate. 3. At what amount will Tanner-UNF report its investment in the December 31, 2024, balance sheet?

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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