Question

2 HW Problems Exercise 12-1 Securities held-to-maturity; bond investment; effective interest, discount [LO12-1 Tanner-UNF Corporation acquired as a long-term I investment $170 million of 6.0% bonds, dated July 1, on July 1, 2018, Company ent has the positive intent and abilty to hold the bonds until maturity. The market interest rate (yield) was 8% for bonds of similar risk and maturity. Tanner-UNF paid $140.0 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, 2018, was $150.0 million. 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 3. At what amount will Tanner-UNF 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 $120.0 million. Prepare the journal entry to record the sale. market) rate. Complete this question by entering your answers in the tabs below Req 1 and 2 Req 3 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. (If no entry Is required for a tra your answers in millions rounded to 2 decimal places, (Ie,5,500,000 should be entered as 5.s0).) n/event, select "No journal entry required" in the first account field. Enter Journal entry worksheet Prey 2 of 10ll Next >

Answer 1

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