Tanner-UNF Corporation acquired as a long-term investment $240 million of 5% bonds, dated July 1, on July 1, 2018. The market interest rate (yield) was 6% for bonds of similar risk and maturity. Tanner-UNF paid $220 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 $225 million.

PRUDS F19 i Hel Exercise 12-5 Trading securities (L012-2] Tanner-UNF Corporation acquired as a long-term investment $240 million of 5% bonds, dated July 1, on July 1, 2018. The market interest rate (yield) was 6% for bonds of similar risk and maturity. Tanner-UNF paid $220 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 $225 million Required: 1. & 2. 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. 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 $200 million. Prepare the journal entries to record the sale. Complete this question by entering your answers in the tabs below. Reg 1 and 2 Req3 Reg 4 Prepare any additional Journal entry necessary for Tanner-UNF to report its Investment in the December 31, 2018, balance sheet. (If no entry is required for a transaction/event, select No journal entry required in the first account held. Enter your answers in millions rounded to I decimal place, (1.0, 5.500,000 should be entered as 5.5) Prev 1 of 5 Next >