Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Tanner-UNF Corporation acquired as a long-term Investment $360 million of 8.0% bonds, dated July 1, on July 1, 2021. Company management has the positive Intent

image text in transcribed

Tanner-UNF Corporation acquired as a long-term Investment $360 million of 8.0% bonds, dated July 1, on July 1, 2021. Company management has the positive Intent and ability to hold the bonds until maturity. The market Interest rate yleld) was 10% for bonds of similar risk and maturity. Tanner-UNF pald $330.0 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, 2021. was $340.0 million. Required: 1. & 2. Prepare the Journal entry to record Tanner-UNF's Investment in the bonds on July 1, 2021 and interest on December 31, 2021, at the effective (market) rate. 3. At what amount will Tanner-UNF report its Investment in the December 31, 2021, 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, 2022, for $320.0 million. Prepare the journal entry to record the sale. Complete this question by entering your answers in the tabs below. Req 1 and 2 Reg 3 Reg 4 At what amount will Tanner-UNF report its investment in the December 31, 2021, balance sheet? (Enter your answer in millions rounded to 1 decimal place, (i.e., 5,500,000 should be entered as 5.5).) Investment $ 360.0 million

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Essentials Of Internal Auditing CIA Part 1 2021

Authors: Muhammad Zain

1st Edition

B09B36MRH2, 979-8542949130

More Books

Students also viewed these Accounting questions

Question

What are controllable costs?

Answered: 1 week ago