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This is a variation of E 12-1 modified to focus on trading securities.) Tanner-UNF Corporation acquired as an investment $240 million of 6% bonds, dated

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This is a variation of E 12-1 modified to focus on trading securities.) Tanner-UNF Corporation acquired as an investment $240 million of 6% bonds, dated July 1, on July 1, 2021. Company management is holding the bonds in its trading portfolio. The market interest rate (yield) was 8% for bonds of similar risk and maturity. Tanner-UNF paid $200 million for the bonds. The company will receive inter- est 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 $210 million. Required: 1. Prepare the journal entry to record Tanner-UNF's investment in the bonds on July 1, 2021. 2. Prepare the journal entry by Tanner-UNF to record interest on December 31, 2021, at the effective market) rate. 3. Prepare any additional journal entry necessary for Tanner-UNF to 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 $190 million. Prepare the journal entries required on the date of sale. Tanner-UNF Corporation acquired as a long-term investment $240 million of 6% bonds, dated July 1. on July 1 2021. Company management has the positive intent and ability to hold the bonds until maturity. The market inter ndest rate (yield) was 8% 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 changing market condi tions, the fair value of the bonds at December 31, 2021, was $210 million. Required: 1. Prepare the journal entry to record Tanner-UNF's investment in the bonds on July 1, 2021. 2. Prepare the journal entries by Tanner-UNF to record 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? Why? 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 $190 million. Prepare the journal entry to record the sale. Mills Cornoration

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