ch 12 1

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 semlannually 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