Tanner-UNF Corporation acquired as an Investment $240 million of 7% bonds, dated July 1, on July 1, 2024. Company management is holding the bonds in its trading portfolio. The market Interest rate (yield) was 9% 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.

FINANCIAL ACCOUNTING
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Chapter1: Financial Statements And Business Decisions
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Tanner-UNF Corporation acquired as an Investment $240 million of 7% bonds, dated July 1, on July 1, 2024. Company management is
holding the bonds in its trading portfollo. The market interest rate (yield) was 9% 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. Prepare any additional Journal entry necessary for Tanner-UNF to 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 entries required on the date of sale.
Complete this question by entering your answers in the tabs below.
Req 1 and 2 Req 3
Req 4
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.
Note: If no entry is required for a transaction/event, select "No journal entry required" in the first account field. Do not round
intermediate calculations. Enter your answers in millions rounded to 1 decimal place, (i.e., 5,500,000 should be entered as 5.5).
Show less
View transaction list
Journal entry worksheet
<
1
2
Record Tanner-UNF's investment in the bonds on July 1, 2024.
Note: Enter debits before credits.
Date
July 01, 2024
Record entry
General Journal
Clear entry
Debit
Credit
View general journal
>
Transcribed Image Text:Tanner-UNF Corporation acquired as an Investment $240 million of 7% bonds, dated July 1, on July 1, 2024. Company management is holding the bonds in its trading portfollo. The market interest rate (yield) was 9% 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. Prepare any additional Journal entry necessary for Tanner-UNF to 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 entries required on the date of sale. Complete this question by entering your answers in the tabs below. Req 1 and 2 Req 3 Req 4 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. Note: If no entry is required for a transaction/event, select "No journal entry required" in the first account field. Do not round intermediate calculations. Enter your answers in millions rounded to 1 decimal place, (i.e., 5,500,000 should be entered as 5.5). Show less View transaction list Journal entry worksheet < 1 2 Record Tanner-UNF's investment in the bonds on July 1, 2024. Note: Enter debits before credits. Date July 01, 2024 Record entry General Journal Clear entry Debit Credit View general journal >
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