Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Tanner-UNF Corporation acquired as an investment $240 milion of 7% bonds, dated July 1 , on July 1, 2024. Company management is holding the bonds

image text in transcribed
image text in transcribed
Tanner-UNF Corporation acquired as an investment $240 milion of 7% bonds, dated July 1 , on July 1, 2024. Company management is holding the bonds in its trading portfolio. The market interest rate (yield) was 9% for bonds of similar risk and maturity. Tanner-UNF paid $200 million for the bonds. The company will receive interest semiannually on June 30 and December 31 , As a result of chang ing market conditions, the fair value of the bonds at December 31,2024 , was $210 million. Required: 1. \& 2. Prepare the journal entry to record Tanner-UNF's investment in the bonds on July 1, 2024 and interest on December 31,2024, at the effective (market) rate. 3. Prepare any additional journal entry necessary for Tanner-UNF to report its investment in the December 31, 2024, 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, 2025, for $190 million. Prepare the journal entries required on the date of sale. 8 Answer is not complete. Complete this question by entering your answers in the tabs below. Suppose Moody's bond rating agency downgraded the risk rating of the bonds motivating Tanner-UNF to sell the investment on January 2, 2025, for $190 million. Prepare the joumal entries required on the date of saic. Note: If no entry is required for a transaction/event, select "No foumal entry required" in the first account field, Do not round intermediate calculations. Enter your answers in mililons rounded to 1 decimal place, 0.2,5,500,000 should be entered as 5.5). Complete this question by entering your answers in the tabs below. Suppose Moody's bond rating agency downgraded the risk rating of the bonds motivating Panner-UNF to sell the investment Suppose Moody's bond rating agency downgraded the risk rating of the bonds motivating Tann 2025, for $190 million. Prepare the fournal entries required on the date of sat- on January 2,2025 , for $190 milion. Prepare the journal entries required on the date of sare Note: If no entry is required for a transaction/event, select "No joumal entry required" in ticirst account field. Do not round Note: If no entry is required for a transactionyevent, select "No joumal entry required in int intermediate calculations. Enter your answers in millions rounded to 1 decimal place, (1,e.,5,500,000 should be entered as 5.5)

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_2

Step: 3

blur-text-image_3

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

Audit Of The Safety Of Electrical Installations

Authors: Papa Samba Agne

1st Edition

6205799308, 978-6205799307

More Books

Students also viewed these Accounting questions