Tanner-UNF Corporation acquired as a long-term investment $310.0 million of 6.0% bonds, dated July 1, on July 1, 2024. Company management has the positive intent and ability to hold the bonds until maturity. Tanner-UNF paid $310.0 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, 2024, was $290.0 million.

Required:

1. How will Tanner-UNFs investment in the bonds on July 1, 2024, affect the financial statements?

2. How will Tanner-UNFs receipt of interest on December 31, 2024, affect the financial statements?

3. At what amount will Tanner-UNF report its investment in the December 31, 2024, 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, 2025, for $270.0 million. How will the sale of the bond investment affect Tanner-UNFs financial statements?