Answered step by step
Verified Expert Solution
Question
1 Approved Answer
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 in
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 in a trading portfolio. 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-UNF's 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 Moody's 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. Complete this question by entering your answers in the tabs below. Req 1 to 3 Req 4 Prepare the journal entry to record Tanner-UNF's investment in the bands on July 1, 2024, interest on December 31, 2024, at the effective (market) rate and the fair value adjustment at December 31. Note: If no entry is required for a transaction/event, select "No journal entry required" in the first account field. Enter your answers in millions, (i.e., 10,000,000 should be entered as 10). View transaction list Journal entry worksheet 1 2 3 Record Tanner-UNF's investment in the bonds on July 1, 2024. Note: Enter debits before credits. Date July 01 General Journal Debit Credit Record entry Clear entry View general journal Show less Complete this question by entering your answers in the tabs below. Req 1 to 3 Req 4 Prepare the journal entry to record Tanner-UNF's 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. Note: If no entry is required for a transaction/event, select "No journal entry required" in the first account field. Enter your answers in millions, (i.e., 10,000,000 should be entered as 10). Show less A View transaction list Journal entry worksheet 1 2 3 Record interest on December 31, 2024. Note: Enter debits before credits. Date December 31 General Journal Debit Credit Record entry Clear entry View general journal Prepare the journal entry to record Tanner-UNF's 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. Note: If no entry is required for a transaction/event, select "No journal entry required" in the first account field. Enter your answers in millions, (i.e., 10,000,000 should be entered as 10). Show less A View transaction list Journal entry worksheet < 1 2 3 Record the fair value adjustment at December 31. Note: Enter debits before credits. Date December 31 General Journal Debit Credit Record entry Clear entry View general journal View transaction list Journal entry worksheet 1 Record the sale. Note: Enter debits before credits. Date January 02 General Journal Debit Credit Record entry Clear entry View general journal
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started