Exercise 12-1 (Algo) Securities held-to-maturity; bond investment; effective interest, discount (L012-1] Tanner-UNF Corporation acquired as a long-term investment $350 million of 70% bonds, dated July 1, on July 1, 2021. 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 $320.0 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 $330.0 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 3. At what amount will Tanner-UNF 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 $310.0 million. Prepare the journal entry to record the sale. Complete this question by entering your answers in the tabs below. Req 1 and 2 Reg 3 Reg 4 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. (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, (.e., 5,500,000 should be entered as 5.5).) View transaction list Journal entry worksheet Record Tanner-UNF's investment in the bonds on July 1, 2021. Note: Enter debits before credits Date General Journal Debit Credit July 01, 2021 . EL. LEV- 4. Suppose Moody's bond rating agency downgraded the risk rating of the bonds motivating Tanne January 2, 2022, for $310.0 million. Prepare the journal entry to record the sale. Complete this question by entering your answers in the tabs below. Req 1 and 2 Req3 Reg 4 At what amount will Tanner-UNE report its investment in the December 31, 2021, balance sheet? (Enter millions rounded to 1 decimal place, (i.e., 5,500,000 should be entered as 5.5).) Investment million 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 January 2, 2022, for $310.0 million. Prepare the journal entry to record the 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 (.e., 5,500,000 should be entered as 5.5).) Show less 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 General Journal Debit Credit Date January 02, 2022
