Unsure how to solve for a few of the parts, thank you.
Tanner-UNF Corporation acquired as a long-term investment $360 million of 8% bonds, dated July 1, on July 1, 2021. Company management has the positive intent and ability to hold the bonds until maturity, but when the bonds were acquired Tanner-UNF decided to elect the fair value option for accounting for its investment. The market interest rate (yield) was 10% for bonds of similar risk and maturity. Tanner-UNF paid $330 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 million. Required: 1. How would this investment be classified on Tanner-UNF's balance sheet? 2. to 4. Prepare the journal entry to record Tanner-UNF's investment in the bonds on July 1, 2021, interest on December 31, 2021, at the effective ( market) and fair value changes as of December 31, 2021. 5. At what amount will Tanner-UNF report its investment in the December 31, 2021, balance sheet? 6. 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 million. Prepare the journal entries to record the sale. Answer is complete but not entirely correct. Return to questi pur Juuru wru UTC U T UT, LUE,"TIT --, cu the effective (market) and fair value changes as of December 31, 2021. (If no entry is required for a transaction/event, "No journal entry required" in the first account field. Enter your answers in millions rounded to 2 decimal places (i.e., 5,50,000 should be entered as 5.50).) Show le No Credit Transaction 1 Debit 360.00 General Journal Investment in bonds Cash Discount on bond investment 330.00 30.00 Cash 14.40 2.10 Discount on bond investment Interest revenue 16.50 30.00 X Fair value adjustment Gain on investments (unrealized, NI) 30.00 X Req1 Req 5 > Req 1 Reg 2 to 4 Req 5 Req 6 At what amount will Tanner-UNF report its investment in the December 31, 2021, balance sheet millions, (i.e., 10,000,000 should be entered as 10).) Investment $ 328 X million > Req 1 Req 2 to 4 Reg 5 Req 6 Suppose Moody's bond rating agency downgraded the risk rating of the bonds motivating Tanner-UNF to sell the invest on January 2, 2022, for $320 million. Prepare the journal entries to record the sale. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field. Enter your answers in millions rounded to decimal places (i.e., 5,500,000 should be entered as 5.50).) Show | No Transaction General Journal Credit Debit 320.00 Cash Fair value adjustment 320.00 X 2 Cash Discount on bond investment Loss on investment (unrealized, NI) Investment in bonds 320.00 27.90 12.10 360.00
