Exercise 12-5 Traaing securities (LO12-2 Tanner-UNF Corporation acquired as a long-term investment $200 million of 7 % bonds, dated July 1, on July 1, 2018. The market interest rate (yield) was 9 % for bonds of similar risk and maturity. Tanner-UNF paid $160 million for the bonds. The company will receive interest semiannually on June 30 and December 31. Company management is holding the bonds in its trading portfolio. As a result of changing market conditions, the fair value of the bonds at December 31, 2018, was $170 million. Requlred: 1. & 2. Prepare the joumal 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. Prepare any additional journal entry necessary for Tanner-UNF to 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 $150 million. Prepare the journal entries to record the sale. Complete this question by entering your answers in the tabs below. Req 3 Req 1 and 2 Req 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 1 decimal place, (i.e., 5,500,000 should be entered as 5.5).) View transaction list Journal entry worksheet 2 Record Tanner-UNF's investment in the bonds on July 1, 2018. Note: Enter debits before credits. Event General Journal Debit Credit 1 Record entry Clear entry View general journal Journal entry worksheet 1 2 December 31, 2018. Record interest on Note: Enter debits before credits Event General Journal Debit Credit 2 Clear entry Record entry View general journal Journal entry worksheet 1 Record any adjustment necessary to report the bond investment in the December 31, 2018 balance sheet. Note: Enter debits before credits. Event General Journal Debit Credit 1 Clear entry Record entry View general journal Journal entry worksheet 1 2 Record the entry to adjust the fair value. Note: Enter debits before credits. Event Debit General Journal Credit 1 Record entry Clear entry View general journal