Logo
Home Study Material Contact Search
AI Chat FREE
  1. business
  2. accounting
  3. tanner-unf corporation acquired as a long-term inv

Tanner-UNF Corporation acquired as a long-term investment $245 million of 8% bonds, dated July 1,...

50.1K

Verified Solution

Question

Accounting

image
Tanner-UNF Corporation acquired as a long-term investment $245 million of 8% bonds, dated July 1, on July 1, 2018 The market interest rate (yield) was 10% 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. Company management has classified the bonds as available-for-sale investments. As a result of changing market conditions, the fair value of the bonds at December 31, 2018, was $205 million Required 1. & 2. Prepare the journal entry to record Tanner-UNF's investment in the bonds on July 1, 2018 and interest on December 31, 2018, at the effective (market) rate additional journal entry necessary for Tanner-UNF to report its investment in the December 31, 2018, balance sheet onds motivating Tanner-UNF to sell the investment on 4. Suppose Moody's bond rating agency downgraded the risk rating of the b January 2, 2019, for $180 million. Prepare the journal entries necessary to record the sale, including updating the fair-value adjustment recording any reclassification adjustment, and recording the sale Complete this question by entering your answers in the tabs below. Req 1 and 2 Req 3Req 4

Answer & Explanation Solved by verified expert
Get Answers to Unlimited Questions

Join us to gain access to millions of questions and expert answers. Enjoy exclusive benefits tailored just for you!

Membership Benefits:
  • Unlimited Question Access with detailed Answers
  • Zin AI - 3 Million Words
  • 10 Dall-E 3 Images
  • 20 Plot Generations
  • Conversation with Dialogue Memory
  • No Ads, Ever!
  • Access to Our Best AI Platform: Flex AI - Your personal assistant for all your inquiries!
Become a Member

Other questions asked by students