50.1K

Verified Solution

Link Copied!

it says answer is incomplete. what am i missing ?

Tanner-UNF Corporation acquired as a long-term investment $300 million of 6% bonds, dated July 1, on July 1, 2021. Company management has classified the bonds as an available for sale investment. The market interest rate (yleld) was 8% for bonds of similar risk and maturity. Tanner-UNF paid $250 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 $260 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. 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 $240 million. Prepare the journal entries necessary to record the sale, including updating the fair-value adjustment, recording any reclassification adjustment, and recording the sale, Answer is not complete. Complete this question by entering your answers in the tabs below. Req 1 and 2 Req3 Reg 4 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. (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 1 decimal place, (I.e., 5,500,000 should be entered as 5.5).) No Date General Journal Debit Credit July 01, 2021 investment in bonds 300.0 Discount on bond investment 50.0 Cash 250.0 1 0 9.0 2 December 31, 202 Cash 1.0 Discount on bond Investment Interest revenue olo 10.0 Roo Tanner-UNF Corporation acquired as a long-term investment $300 million of 6% bonds, dated July 1, on July 1, 2021. Company management has classified the bonds as an available-for-sale investment. The market interest rate (yield) was 8% for bonds of similar risk and maturity. Tanner-UNF paid $250 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 $260 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. 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 $240 million. Prepare the journal entries necessary to record the sale, including updating the fair-value adjustment, recording any reclassification adjustment, and recording the sale. Answer is not complete. Complete this question by entering your answers in the tabs below. Req 1 and 2 Req3 Reg 4 Prepare any additional Journal entry necessary for Tanner-UNF to report its investment in the December 31, 2021, balance sheet. (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 1 decimal place. (.e., 5,500,000 should be entered as 5.5).) No Date General Journal Debit Credit December 31, 202 Fair value adjustment 90 Gain on investment (unrealized, OCH 9,0 1 Tanner-UNF Corporation acquired as a long-term investment $300 million of 6% bonds, dated July 1, on July 1, 2021 Company management has classified the bonds as an available for sale investment. The market interest rate yield) was 8% for bonds of similar risk and maturity. Tanner-UNF paid $250 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 $260 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. 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 $240 million. Prepare the journal entries necessary to record the sale, including updating the fair-value adjustment, recording any reclassification adjustment and recording the sale. Answer is not complete. Complete this question by entering your answers in the tabs below. Reg 1 and 2 Req3 Req 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 $240 million. Prepare the journal entries necessary to record the sale, including updating the fair value adjustment, recording any reclassification adjustment, and recording 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 1 decimal place, (1, 5,500,000 should be entered as 5,5).) Show less NO General Journal Credit Date January 02, 2022 Debit 20.0 1 Fair value adjustment > 200 2 11.00 January 02, 2022 Fair value adjustment Reclassification adjustment (OCI) SO 11.0 3 January 02, 2022 Cash Discount on bond investment Loss on investment (NI) Investment in bonds 240.0 49.0 11.0 300.0

Answer & Explanation Solved by verified expert

See Answer