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Tanner - UNF Corporation acquired as a long - term investment $ 2 0 0 million of 6 % bonds, dated July 1 , 2

Tanner-UNF Corporation acquired as a long-term investment $200 million of 6% bonds, dated July 1,2024. Assume Tanner-UNF management is holding the bonds as available-for-sale securities. 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 31,2024, was $210 million.
Required:
1. to 3. Prepare the journal entry to record Tanner-UNFs investment in the bonds on July 1,2024, interest on December 31,2024, at the effective (market) rate and the fair value adjustment at December 31.
4. Suppose Moodys bond rating agency downgraded the risk rating of the bonds motiving Tanner-UNF to sell the investment on January 2,2025, for $190 million. Prepare the journal entry to record the sale.

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