- Tanner Unf Corporation Acquired As An Investment 230 Million Of 8 Bonds Dated July 1 On July 1 2021 Company Manage 1 (162.04 KiB) Viewed 39 times
Tanner-UNF Corporation acquired as an investment $230 million of 8% bonds, dated July 1, on July 1, 2021. Company management is holding the bonds in its trading portfolio. The market interest rate (yield) was 10% for bonds of similar risk and maturity. Tanner-UNF paid $210 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 $220 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 $200 million. Prepare the journal entries required on the date of sale. Complete this question by entering your answers in the tabs below. Reg 1 and 2 Reg 3 Req 4 Prepare any additional journal entry necessary for Tanner-UNF to report its investment in the December 31, 2021, balance sheet. (If 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, (l.e., 5,500,000 should be entered as 5.5).) View transaction list 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 Credit December 31 2021 < Prev 2 of 8 LE Next >
Tanner-UNF Corporation acquired as an investment $230 million of 8% bonds, dated July 1, on July 1, 2021. Company management is holding the bonds in its trading portfolio. The market interest rate (yield) was 10% for bonds of similar risk and maturity. Tanner-UNF paid $210 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 $220 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 $200 million. Prepare the journal entries required on the date of sale. Complete this question by entering your answers in the tabs below. Req 1 and 2 Req 3 Reg 4 Suppose Moody's bond rating agency downgraded the risk rating of the bonds motivating Tanner-UNF to sell the investment on Januar 2, 2022, for $200 million. Prepare the journal entries required on the date of sale. (If no entry is required for a transaction/event, sele "No journal entry required" in the first account field. Enter your answers in millions rounded to 1 decimal place, (i.e., 5,500,000 shoul be entered as 5.5).) Show less View transaction list 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 Credit