Tanner-UNF Corporation acquired as a long-term investment $240 million of 6% bonds, dated July 1, on July 1, 2024. Company management has the positive intent and ability to hold the bonds until maturity. 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 interest semiannually on June 30 and December 31. As a result of changing 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-UNFs investment in the bonds on July 1, 2024 and interest on December 31, 2024, at the effective (market) rate.

3. At what amount will Tanner-UNF report its investment in the December 31, 2024, balance sheet?

4. Suppose Moodys 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 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, 2024 and interest on December 31, 2024, at the effective (market) rate. Note: If no entry is required for a transaction/event, select "No journal entry required" in the first account field. Do not round intermediate calculations. Enter 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, 2024. Note: Enter debits before credits. Journal entry worksheet Note: Enter debits before credits. At what amount will Tanner-UNF report its investment in the December 31,2024 , balance sheet? Note: Enter your answer in millions rounded to 1 decimal place, (i.e., 5,500,000 should be entered as 5.5). Do not round intermediate calculations. 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 entry to record the sale. Note: If no entry is required for a transaction/event, select "No journal entry required" in the first account field. Do not round intermediate calculations. Enter your answers in millions rounded to 1 decimal place, (i.e., 5,500,000 should be entered as 5.5). Show less Journal entry worksheet Prepare any journal entry needed to adjust the investment to fair value. Note: Enter debits before credits. 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, 2024 and interest on December 31, 2024, at the effective (market) rate. Note: If no entry is required for a transaction/event, select "No journal entry required" in the first account field. Do not round intermediate calculations. Enter 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, 2024. Note: Enter debits before credits. Journal entry worksheet Note: Enter debits before credits. At what amount will Tanner-UNF report its investment in the December 31,2024 , balance sheet? Note: Enter your answer in millions rounded to 1 decimal place, (i.e., 5,500,000 should be entered as 5.5). Do not round intermediate calculations. 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 entry to record the sale. Note: If no entry is required for a transaction/event, select "No journal entry required" in the first account field. Do not round intermediate calculations. Enter your answers in millions rounded to 1 decimal place, (i.e., 5,500,000 should be entered as 5.5). Show less Journal entry worksheet Prepare any journal entry needed to adjust the investment to fair value. Note: Enter debits before credits