Check my work 2. Tanner-UNF Corporation acquired as an investment $290 million of 8% bonds, dated July 1, on July 1, 2021. Company management is holding the bonds in its trading portfolio. The market interest rate (yield) was 10% for bonds of similar risk and maturity. Tanner-UNF paid $260 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, 2021, was $270 million. 7.14 points Required: 1. & 2. Prepare the journal entry to record Tanner-UNF's investment in the bonds on July 1, 2021 and interest on December 31, 2021, at the effective (market) rate. 3. Prepare any additional journal entry necessary for Tanner-UNF to report its investment in the December 31, 2021, 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, 2022, for $250 million. Prepare the journal entries required on the date of sale. eBook Print Complete this question by entering your answers in the tabs below. References Req 1 and 2 Reg 3 Reg 4 Suppose Moody's bond rating agency downgraded the risk rating of the bonds motivating Tanner-UNF to sell the investment on Janui 2022, for $250 million. Prepare the journal entries required on the date of sale. (If no entry is required for a transaction/event, selec journal entry required" in the first account field. Enter your answers in millions rounded to 1 decimal place, (i.e., 5,500,000 should b entered as 5.5).) Show View transaction list Journal entry worksheet 1 2 > Prepare any journal entry needed to adjust the investment to fair value. Note: Enter debits before credits. Debit Credit Date General Journal January 02, 2022 Loss on investment (unrealized, NI) Fair value adjustment 11.4 11.4 2 Tanner-UNF Corporation acquired as an investment $290 million of 8% bonds, dated July 1, on July 1, 2021. Company management is holding the bonds in its trading portfolio. The market interest rate (yield) was 10% for bonds of similar risk and maturity. Tanner-UNF paid $260 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, 2021, was $270 million. 7.14 points Required: 1. & 2. Prepare the journal entry to record Tanner-UNF's investment in the bonds on July 1, 2021 and interest on December 31, 2021, at the effective ( market) rate. 3. Prepare any additional journal entry necessary for Tanner-UNF to report its investment in the December 31, 2021, 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, 2022, for $250 million. Prepare the journal entries required on the date of sale. eBook Print Complete this question by entering your answers in the tabs below. References Req 1 and 2 Reg 3 Reg 4 Suppose Moody's bond rating agency downgraded the risk rating of the bonds motivating Tanner-UNF to sell the investment on Janu: 2022, for $250 million. Prepare the journal entries required on the date of sale. (If no entry is required for a transaction/event, selec journal entry required" in the first account field. Enter your answers in millions rounded to 1 decimal place, (i.e., 5,500,000 should b entered as 5.5).) Show View transaction list Journal entry worksheet Record the sale of the investment by Tanner-UNF. Note: Enter debits before credits. Debit Credit Date General Journal January 02, 2022 Cash Discount on bond investment Loss on investment (NI) Investment in bonds 250.0 28.6 11.4 290.0 Return to question 2 Exercise 12-5 (Algo) Trading securities (LO12-1, 12-3] 714 points Tanner-UNF Corporation acquired as an investment $290 million of 8% bonds, dated July 1, on July 1, 2021. Company management is holding the bonds in its trading portfolio. The market interest rate (yield) was 10% for bonds of similar risk and maturity. Tanner-UNF paid $260 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, 2021, was $270 million Required: 1. & 2. Prepare the journal entry to record Tanner-UNF's investment in the bonds on July 1, 2021 and interest on December 31, 2021, at the effective (market) rate. 3. Prepare any additional journal entry necessary for Tanner-UNF to report its investment in the December 31, 2021, 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, 2022, for $250 million. Prepare the journal entries required on the date of sale. Answer is complete but not entirely correct. Complete this question by entering your answers in the tabs below. Reg 1 and 2 Reg 3 Reg 4 Suppose Moody's bond rating agency downgraded the risk rating of the bonds motivating Tanner-UNF to sell the investment on January 2, 2022, for $250 million. Prepare the journal entries required on the date of sale. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field. Enter your answers in millions rounded to 1 decimal place, (i.e., 5,500,000 should be entered as 5.5).) Show less No Debit Credit 1 Date General Journal January 02, 2022 Loss on investment (unrealized, NI) Fair value adjustment 11.4 X oo 11.4 X 2 January 02, 2022 Cash Discount on bond investment Loss on investment (NI) Investment in bonds 250.0 28.6 11.4 X 290.0 Check my work 2. Tanner-UNF Corporation acquired as an investment $290 million of 8% bonds, dated July 1, on July 1, 2021. Company management is holding the bonds in its trading portfolio. The market interest rate (yield) was 10% for bonds of similar risk and maturity. Tanner-UNF paid $260 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, 2021, was $270 million. 7.14 points Required: 1. & 2. Prepare the journal entry to record Tanner-UNF's investment in the bonds on July 1, 2021 and interest on December 31, 2021, at the effective (market) rate. 3. Prepare any additional journal entry necessary for Tanner-UNF to report its investment in the December 31, 2021, 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, 2022, for $250 million. Prepare the journal entries required on the date of sale. eBook Print Complete this question by entering your answers in the tabs below. References Req 1 and 2 Req3 Reg 4 Prepare any additional journal entry necessary for Tanner-UNF to report its investment in the December 31, 2021, balance sheet. (If entry is required for a transaction/event, select "No journal entry required" in the first account field. Enter your answers in millions r to 1 decimal place, (i.e., 5,500,000 should be entered as 5.5).) View transaction list Journal entry worksheet 1 > Record any adjustment necessary to report the bond investment in the December 31, 2021 balance sheet. Note: Enter debits before credits. Date General Journal Debit Credit December 31, 2021 Fair value adjustment 11.4 Loss on investment (unrealized, NI) 11.4
