a. Suppose Moody's boed rating agency upgraded the risk rating of the bonds, and Mills deeided to sell the investment on January 2. 2019, for $290 million Prepare the journal entry to record the sale E 12-3 Securitles held-to-maturity FFAT Corporation is a confectionery wholesaler that frequently buys and sells securities to mect various invest ment objectives. The following selected transactioens relale to FF&Ts investment activities daring the last wo months of 201S. AtNovember 1,FF&T held $48 million of 20-year, 10%8 bonds of Convenience, Inc purchased May 1, 2018, at face value. Management has the positive intent and ahility to hold the bonds until maturnity FF&T's fiscal year ends on December 31 Recelved semiannual interest of $2.4 milion from the Convenience, Inc. bonds Purchased 12% bonds of Facsinde Enterprises at their S 30 millon face vaae, to be held unti they mature in 2024. Semiannual interest is payable May 31 and November 30 Purchased US. Treesury bils to be held untl they mature in two months for $8.9 milsion Recorded any necessary adjusting entryts) relating to the Investments Nov. 1 Dec. 1 The fair values of the investments at December 31 were Convenlience bonds Facsinile Enterprises bonds U.S. Treasury bills $44.7 million 30.9 miliorn 89 million Required Prepare the appropriate journal entry for each transaction or event The FASB Accoumting Standards Codification represents the single source of authoritative U.S. generally accepsed accounting principles. E 12-4 FASB codification research LO12-2 I. Oblain the relevant authoritative literature on accounting for investments in held-to-maturity securities using the FASB's Codification Rescarch Sysiem at the FASB website www.fash.org COD DE 2 What is the specific citation that describes evamples of circumstances under which an investment in debt is available to be sold and therefore should not be classified as held-to-maturity? 3. List the circumstances and conditions. IThis is a variation of E 12-1 focusing on trading securities ) Tanner-UNF Corporation acquired as a long-term investment $240 million of 6 bonds, dated July 1, on July 1, 2018 The market interest rae (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. Company management is holding the bonds in its trading portfolio. A of the bonds at December 31, 2018, was $210 million Required: ng securities s a result of changing market conditions, the fair value 1. Prepare the journal entry to record Tanner-UNF's investment in the bonds on July 1. 2018 2. Prepare the journal entries by Tanner-UNF to record interest on December 31, 2018, investment in the bonds on July 1.2018 at the effective (market) rate. 3 Prepure any aditional journal entry necesary foe Tancr-UNF to report its investment in the December 3 4. Suppose Moody's hond rating agency downgraded the risk rating of the bonds motivating Tafner-U'NF to sell 2018, balance sheet. the investment on January 2, 2019, for $190 million. Prepare the journal entry to recoed the sale Mills Corporation acquired as a long-term investment S240 million of 6% bonds, dated July 1 on July 1. 2018. Company management has the positive intent and ability to hold the bonds until maturity. The market interest rate yield) was 4% for bonds of similar risk and maturity Mills paid S2S0 million for the hond. 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, 2018,was $270 million. Requlred: E 12-6 [This is a variation of E 12-2 focusing on trading securities ] rrading securities e LO12-1 I. Prepare the journal entry to record Mills investment in the bonds on July 1, 2018 2 Prepare the journal entries by Mills to record interest on December 31. 2018, at the effective (market) rate a. Suppose Moody's boed rating agency upgraded the risk rating of the bonds, and Mills deeided to sell the investment on January 2. 2019, for $290 million Prepare the journal entry to record the sale E 12-3 Securitles held-to-maturity FFAT Corporation is a confectionery wholesaler that frequently buys and sells securities to mect various invest ment objectives. The following selected transactioens relale to FF&Ts investment activities daring the last wo months of 201S. AtNovember 1,FF&T held $48 million of 20-year, 10%8 bonds of Convenience, Inc purchased May 1, 2018, at face value. Management has the positive intent and ahility to hold the bonds until maturnity FF&T's fiscal year ends on December 31 Recelved semiannual interest of $2.4 milion from the Convenience, Inc. bonds Purchased 12% bonds of Facsinde Enterprises at their S 30 millon face vaae, to be held unti they mature in 2024. Semiannual interest is payable May 31 and November 30 Purchased US. Treesury bils to be held untl they mature in two months for $8.9 milsion Recorded any necessary adjusting entryts) relating to the Investments Nov. 1 Dec. 1 The fair values of the investments at December 31 were Convenlience bonds Facsinile Enterprises bonds U.S. Treasury bills $44.7 million 30.9 miliorn 89 million Required Prepare the appropriate journal entry for each transaction or event The FASB Accoumting Standards Codification represents the single source of authoritative U.S. generally accepsed accounting principles. E 12-4 FASB codification research LO12-2 I. Oblain the relevant authoritative literature on accounting for investments in held-to-maturity securities using the FASB's Codification Rescarch Sysiem at the FASB website www.fash.org COD DE 2 What is the specific citation that describes evamples of circumstances under which an investment in debt is available to be sold and therefore should not be classified as held-to-maturity? 3. List the circumstances and conditions. IThis is a variation of E 12-1 focusing on trading securities ) Tanner-UNF Corporation acquired as a long-term investment $240 million of 6 bonds, dated July 1, on July 1, 2018 The market interest rae (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. Company management is holding the bonds in its trading portfolio. A of the bonds at December 31, 2018, was $210 million Required: ng securities s a result of changing market conditions, the fair value 1. Prepare the journal entry to record Tanner-UNF's investment in the bonds on July 1. 2018 2. Prepare the journal entries by Tanner-UNF to record interest on December 31, 2018, investment in the bonds on July 1.2018 at the effective (market) rate. 3 Prepure any aditional journal entry necesary foe Tancr-UNF to report its investment in the December 3 4. Suppose Moody's hond rating agency downgraded the risk rating of the bonds motivating Tafner-U'NF to sell 2018, balance sheet. the investment on January 2, 2019, for $190 million. Prepare the journal entry to recoed the sale Mills Corporation acquired as a long-term investment S240 million of 6% bonds, dated July 1 on July 1. 2018. Company management has the positive intent and ability to hold the bonds until maturity. The market interest rate yield) was 4% for bonds of similar risk and maturity Mills paid S2S0 million for the hond. 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, 2018,was $270 million. Requlred: E 12-6 [This is a variation of E 12-2 focusing on trading securities ] rrading securities e LO12-1 I. Prepare the journal entry to record Mills investment in the bonds on July 1, 2018 2 Prepare the journal entries by Mills to record interest on December 31. 2018, at the effective (market) rate