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Posted: Wed May 04, 2022 4:15 pm
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Tanner-UNF Corporation acquired as an investment $240 million of 6% bonds, dated July 1, on July 1, 2021. Company management is holding the bonds in its trading portfolio. 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, 2021, was $210 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. Prepare any additional journal entry necessary for Tanner-UNF to 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 $190 million. Prepare the journal entries required on the date of sale. > Answer is not complete. Complete this question by entering your answers in the tabs below. Req 1 and 2 Req 3 Req 4 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 millions rounded to 1 decimal place, (i.e., 5,500,000 should be entered as 5.5).) No Date General Journal Debit Credit July 01, 2021 Investment in bonds Discount on bond investment Cash December 31, 202 Cash Discount on bond investment Investment in bonds 1 2 < Req 1 and 2 Req 3 > 333 › › › 240.0 7.2✔ 0.8✔ 40.0✔ 200.0✔ 8.0✔
Answer is not complete. Complete this question by entering your answers in the tabs below. Req 1 and 2 Req 3 Req 4 Prepare any additional journal entry necessary for Tanner-UNF to report its investment in the December 31, 2021, balance sheet. (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, (i.e., 5,500,000 should be entered as 5.5).) No Date General Journal Debit Credit December 31, 202 No journal entry required Req 4 > 1 < Req 1 and 2
Answer is not complete. Complete this question by entering your answers in the tabs below. Req 1 and 2 Req 3 Req 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 $190 million. Prepare the journal entries required on the date of 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, (i.e., 5,500,000 should be entered as 5.5).) Show less No Date General Journal Debit Credit January 02, 2022 No journal entry required January 02, 2022 Cash 1 2 < Req 3 Req 4 > 190.0 39.2 20.0 X 240.0 9.2 x
View transaction list Journal entry worksheet < 1 2 Record interest on December 31, 2021. Note: Enter debits before credits. Date December 31, 2021 Cash Discount on bond investment Investment in bonds Record entry General Journal Clear entry Debit Credit 7.2 0.8 8.0 View general journal >
Journal entry worksheet 1 Record any adjustment necessary to report the bond investment in the December 31, 2021 balance sheet. Note: Enter debits before credits. Date General Journal Debit December 31, 2021 No journal entry required Record entry Clear entry Credit View general journal
Journal entry worksheet 1 2 Prepare any journal entry needed to adjust the investment to fair value. Note: Enter debits before credits. Date General Journal Debit January 02, 2022 No journal entry required Record entry Clear entry < Req 3 Credit View general journal Req 4 > >
Journal entry worksheet < 1 2 Record the sale of the investment by Tanner-UNF. Note: Enter debits before credits. Date General Journal January 02, 2022 Cash Record entry Clear entry < Req 3 Debit Credit 190.0 39.2 20.0 240.0 9.2 View general journal Req 4 >
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Answer is not complete. Complete this question by entering your answers in the tabs below. Req 1 and 2 Req 3 Req 4 Prepare any additional journal entry necessary for Tanner-UNF to report its investment in the December 31, 2021, balance sheet. (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, (i.e., 5,500,000 should be entered as 5.5).) No Date General Journal Debit Credit December 31, 202 No journal entry required Req 4 > 1 < Req 1 and 2
Answer is not complete. Complete this question by entering your answers in the tabs below. Req 1 and 2 Req 3 Req 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 $190 million. Prepare the journal entries required on the date of 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, (i.e., 5,500,000 should be entered as 5.5).) Show less No Date General Journal Debit Credit January 02, 2022 No journal entry required January 02, 2022 Cash 1 2 < Req 3 Req 4 > 190.0 39.2 20.0 X 240.0 9.2 x
View transaction list Journal entry worksheet < 1 2 Record interest on December 31, 2021. Note: Enter debits before credits. Date December 31, 2021 Cash Discount on bond investment Investment in bonds Record entry General Journal Clear entry Debit Credit 7.2 0.8 8.0 View general journal >
Journal entry worksheet 1 Record any adjustment necessary to report the bond investment in the December 31, 2021 balance sheet. Note: Enter debits before credits. Date General Journal Debit December 31, 2021 No journal entry required Record entry Clear entry Credit View general journal
Journal entry worksheet 1 2 Prepare any journal entry needed to adjust the investment to fair value. Note: Enter debits before credits. Date General Journal Debit January 02, 2022 No journal entry required Record entry Clear entry < Req 3 Credit View general journal Req 4 > >
Journal entry worksheet < 1 2 Record the sale of the investment by Tanner-UNF. Note: Enter debits before credits. Date General Journal January 02, 2022 Cash Record entry Clear entry < Req 3 Debit Credit 190.0 39.2 20.0 240.0 9.2 View general journal Req 4 >