Question

4 only.

TannerUNF Corporation acquired as a long term Investment $240 mallon of 8% bonds, dated July , on July , 2018.. The market interest rate tyeld) was 10% for bonds of smilar risk and maturity Tanner-UNF paid $200 mmon for the bonds. The company wil receive interest semiannuality on June 30 and December 31. Company management is holding the bonds in its trading portolio. As a result of changing market conditions, the fair value of the bonds at December 31, 2018, was $210 mtion Required 1.& 2. Prepare the journal entry to record Tanner-UNF's Investment in the bonds on July 1, 2018 and interest on the effective (market) rate 3. Prepare any additional journal entry necessary for Tanner-UNF to report its investment in the December 31, 2018, 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, 2019, for $180 mililion Prepare the journal entries to record the sale 018, at Complete this question by entering your answers in the tabs below. Req 1 and2 Rea Req 4 Suppose Moody's bond rating agency downgraded the risk rating of the boeds motivating Tanner-UNF to sell the investment on January 2, 2019, for $180 million. Prepare the journal entries to record the sale. (If no entry is required for a transaction/event, select "No journal entry req entered as 5.5).) in the first account field. Enter your answers in millions rounded to 1 decimal place, (i.e., 5,500,000 should be Show lessa Journal entry worksheet Record the entry to adjust the fair value. debits before <Prev 20, 8H1 Next ype here to search

Answer 1

4) Net Unrealized holding gains and losses 9.4

Fair Value Adjustment 9.4

(40 - 0.6 - 30) = 9.4