Exercise 12-1 Securities held-to-maturity; bond investment; effective interest, discount [LO12-1] Tanner-UNF Corporation acquired as a long-term investment $150 million of 4.0% 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 6% for bonds of similar risk and maturity. Tanner-UNF paid $120.0 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, 2018, was $130.0 million. Required: 1. & 2. Prepare the journal entry to record Tanner-UNF's investment in the bonds on July 1, 2018 and interest on December 31, 2018, at the effective (market) rate. 3. At what amount will Tanner-UNF report its investment in the December 31, 2018, 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, 2019, for $100.0 million. Prepare the journal entry to record the sale. Req 1 and 2 Req 3 Reg 4 Prepare the journal entry to record Tanner-UNF's investment in the bonds on July 1, 2018 and interest on December 31, 2018, 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 2 decimal places, (i.e., 5,500,000 should be entered as 5.50).) Eu Event 10 General Journal Debit No 1. Credit Investment in bonds Discount on bond investment Cash Cash Loss on sale of investments Discount on bond investment Investment in bonds Complete this question by entering your answers in the tabs below. Req 1 and 2 Req 3 Req 4 At what amount will Tanner-UNF report its investment in the December 31, 2018, balance sheet? (Enter your answer in millions rounded to 2 decimal places, (i.e., 5,500,000 should be entered as 5.50).) Investment million Req 1 and 2 Req3 Req 4 Suppose Moody's bond rating agency downgraded the risk rating of the bonds motivating Tanner-UNF to sell the investment on January 2, 2019, for $100.0 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 2 decimal places (i.e., 5,500,000 should be entered as 5.50).) Show less Debit Credit No | 1 Event 1 General Journal Unrealized holding gainNI Fair value adjustment