60.1K

Verified Solution

Link Copied!

nner-UNF Corporation acquired as a long-term investment $250 million of 4.0% bonds, dated July 1, on July 1, 2021, Company anagement has the positive intent and ability to hold the bonds until maturity. The market interest rate (yield) was 7% for bonds of milar risk and maturity. Tanner-UNF paid $220.0 million for the bonds. The company will recelve interest semiannually on June 30 ad December 31. As a result of changing market conditions, the fair value of the bonds at December 31,2021 , was $220.0 million. equired: . \& 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 he 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 $200.0 million. Prepare the journal entry to record the sale. Complete this question by entering your answers in the tabs below. 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 milllons rounded to 1 decimal plece, (1.e., 5,500,000 should be entered as 5.5).) Prepare the journal entry to record Tanner-UNF's investment in the bonds on July 1, 2021 and interest on Decemb effective (market) rate. (If no entry is required for a transaction/event, select "No journal entry required" in the fi. your answers in millions rounded to 1 decimal place, (i.e., 5,500,000 should be entered as 5.5).) Journal entry worksheet Record Tanner-UNF's investment in the bonds on July 1, 2021. Note: Enter debits before credits. Tanner-UNF Corporation acquired as a long-term investment $250 million of 4.0% 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 (yield) was 7% for bonds of similar risk and maturity. Tanner-UNF paid $220.0 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 $220.0 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 $200.0 million. Prepare the journal entry to record the sale. Complete this question by entering your answers in the tabs below. 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, (1,e,5,500,000 should be entered as 5,5).) 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 $200.0 million. Prepare the journal entry 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 1 decimal place (1.e., 5,500,000 should be entered as 5.5).) Show. lessia Journal entry worksheet