Reference no: EM13865058
Tanner-UNF Corporation acquired as a long-term investment $240 million of 6% bonds, dated July 1, on July 1, 2013. Company management has the positive intent and ability to hold the bonds until maturity. 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, 2013 was $210 million.
Required:
1. Prepare the journal entry to record Tanner-UNF’s investment in the bonds on July 1, 2013.
2. Prepare the journal entry by Tanner-UNF to record interest on December 31, 2013, at the effective (market) rate.
3. At what amount will Tanner-UNF report its investment in the December 31, 2013, balance sheet? Why?
4. Suppose Moody’s bond rating agency downgraded the risk rating of the bonds motivating Tanner-UNF to sell the investment on January 2, 2014, for $190 million. Prepare the journal entry to record the sale.
|
Formulate the null and alternative hypotheses
: Formulate the null and alternative hypotheses
|
|
Critically evaluate the investment and the stocks
: Estimate key risk-return items, such as dividend yield, capital gains yield, stock returns and standard deviation of stock returns. Critically evaluate the investment and the stocks.
|
|
Concept and detailed design of a kit
: The concept and detailed design of a kit for each car is estimated to take 30 hours of the owner's time (his current salary is $2,300 per fortnight).
|
|
Shares of common stock outstanding throughout
: The following are partial income statement account balances taken from the December 31, 2016, year-end trial balance of White and Sons, Inc.: restructuring costs, $300,000; interest revenue, $40,000; before-tax loss on discontinued operations, $400,0..
|
|
Bonds of similar risk and maturity
: Tanner-UNF Corporation acquired as a long-term investment $240 million of 6% bonds, dated July 1, on July 1, 2013. Company management has the positive intent and ability to hold the bonds until maturity. The market interest rate (yield) was 8% for bo..
|
|
What did they do to try to normalize your behavior
: Exercise on Violating Social Norms- Although everyday norms underlie all we do, they remain largely unnoticed and unquestioned. The best proof of the existence of these norms lies in our reactions when they are violated. What did they do to try to..
|
|
Decreased by the mortgage payment
: On January 1, 2012, Chan Enterprises borrowed $100,000 from a bank on a three-year mortgage with an interest rate of 5% per year. On December 30, 2012, Chan paid the bank $36,721. Which of the following items would be decreased by the mortgage paymen..
|
|
What is the annual installments payment
: Set up an amortization schedule for a $30,000 loan to be repaid in equal installments at the end of each of the next 20 years at an interest rate of 10 percent. What is the annual payment?
|
|
When calculating the materials quantity variance
: When calculating the materials quantity variance which of the following is used
|