Exercise 12-10 (Algo) Available-for-sale securities [LO12-1, 12-4) Tanner-UNF Corporation acquired as a long-term investment $250 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 $200 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 $210 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 $190 million. Prepare the journal entries necessary to record the sale, including updating the fair-value adjustment, recording any reclassification adjustment, and recording the sale. Complete this question by entering your answers in the tabs below Req 1 and 2 Reg 3 Reg 4 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, (1.0, 5,500,000 should be entered as 5.5).) View transaction list Journal entry worksheet Record the entry for fair value adjustment. Complete this question by entering your answers in the tabs below. Req 1 and 2 Reg 3 Req 4 Prepare the journal entry to record Tanner-UNF's investment in the bonds on July 1, 2021 and interest on December 31, 20 effective market) rate. (If no entry is required for a transaction/event, select "No journal entry required in the first accour your answers in millions rounded to 1 decimal place, (i.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. General Journal Debit Credit Dato July 01, 2021 Record entry Clear entry View general journal Req 1 and 2 Reg 3 Req4 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).) View transaction list Journal entry worksheet Record the entry for fair value adjustment. Note: Enter debits before credits. General Journal Debit Credit Date December 31 2021 Record entry Clear entry View general journal Check my work 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 $190 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).) Show less View transaction list Journal entry worksheet Record the entry for fair value adjustment, AFS Investment. Note: Enter debits before credits Date General Journal Debit Credit January 02, 2022 Record entry Clear entry View general journal
