Item 2 Item 2 10 points Tanner-UNF Corporation acquired as a long-term investment $260 million of 6.0% 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 9% for bonds of similar risk and maturity. Tanner-UNF paid $220.0 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 $230.0 million. Required: 1. & 2. Prepare the journal entry to record Tanner-UNFs 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 Moodys bond rating agency downgraded the risk rating of the bonds motivating Tanner-UNF to sell the investment on January 2, 2019, for $210.0 million. Prepare the journal entry to record the sale.

Suppose Moodys bond rating agency downgraded the risk rating of the bonds motivating Tanner-UNF to sell the investment on January 2, 2019, for $210.0 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).)

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No	Event	General Journal	Debit	Credit
1	1	Cashselected answer correct	210.00selected answer correct
		Discount on bond investmentselected answer correct	2.10selected answer incorrect
		Loss on sale of investmentsselected answer correct	47.90selected answer incorrect
		Investment in bondsselected answer correct		260.00

Investment

$210.00selected answer incorrect

million