Exercise 12-10 (Algo) Available-for-sale securities [LO12-1, 12-4] Tanner-UNF Corporation acquired as a long-term investment $280 million of 6% bonds, dated July 1, on July 1 , 2021. Company management has classified the bonds as an available-for-sale investment. The market interest rate (yield) was 8% for bonds of similar risk and maturity. Tanner-UNF paid $240 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 $250 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 $230 million. Prepare the journal entries necessary to record the sale, including updating the fair-value adjustment, recording any reclassification adjustment, and recording the sale. 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, (i.e., 5,500,000 should be entered as 5.5).) Prepare any additional journal entry necessary for Tanner-UNF to report its investment in the December 31 , 2021 , balance sheet. (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).) Journal entry worksheet Note: Enter debits before credits. 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 $230 million. Prepare the journal entries necessary to record the sale, including updating the fair-value adjustment, recording any reclassification adjustment, and recording 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, (i.e., 5,500,000 should be entered as 5.5).) \begin{tabular}{l} 1 Record the entry for fair-value adjustment, AFS \\ investment. \\ 2 Record the entry for reclassification adjustment. \\ \hline 3 Record the sale of the investment by Tanner-UNF. \end{tabular} Exercise 12-10 (Algo) Available-for-sale securities [LO12-1, 12-4] Tanner-UNF Corporation acquired as a long-term investment $280 million of 6% bonds, dated July 1, on July 1 , 2021. Company management has classified the bonds as an available-for-sale investment. The market interest rate (yield) was 8% for bonds of similar risk and maturity. Tanner-UNF paid $240 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 $250 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 $230 million. Prepare the journal entries necessary to record the sale, including updating the fair-value adjustment, recording any reclassification adjustment, and recording the sale. 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, (i.e., 5,500,000 should be entered as 5.5).) Prepare any additional journal entry necessary for Tanner-UNF to report its investment in the December 31 , 2021 , balance sheet. (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).) Journal entry worksheet Note: Enter debits before credits. 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 $230 million. Prepare the journal entries necessary to record the sale, including updating the fair-value adjustment, recording any reclassification adjustment, and recording 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, (i.e., 5,500,000 should be entered as 5.5).) \begin{tabular}{l} 1 Record the entry for fair-value adjustment, AFS \\ investment. \\ 2 Record the entry for reclassification adjustment. \\ \hline 3 Record the sale of the investment by Tanner-UNF. \end{tabular}