3 At what amount will TannerUNF report its investment in the

3. At what amount will Tanner-UNF report its investment in the December 31, 2016, balance sheet? (Enter your answer in millions rounded to 2 decimal places (i.e., 5,500,000 should be entered as 5.50)) Investment million Suppose Moody\'s bond rating agency downgraded the risk rating of the bonds motivating Tanner- UNF to sell the investment on January 2, 2017, for $320.0 million. Prepare the journal entry to record the 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 2 decimal places (i.e., 5,500,000 should be entered as 5.50).) 4. View transaction list Journal entry worksheet Record the sale of the investment by Tanner-UNF Note: Enter debits before credits. Event General Journal Debit Credit Record entry Clear entry View general journal

Solution

General Journal Debit Credit 1 Investment in bonds 360 Discount on bond investment 30 Cash 330 2 Cash 360*4% 14.4 Discount on bond investment 2.1 Interest revenue 330*5% 16.5 3 Book value 360 Less: Discount (30.0 – 2.1) 27.9 Investment 332.1 4 Cash 320 Discount on bond investment 340-320 = 20 340-332.1=7.9 (20-7.9) 27.9 Loss on sale of investments 12.1 Investment in bonds 360