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 but when the bonds were acquired Tanner-UNF decided to elect the fair value option for accounting
for its investment. 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
1. Record the entry to recognize fair value changes as of December 31 2013.
2. At what amount will Tanner-UNF report its investment in the December 31 2013 balance sheet?
3. Record the fair value changes as of December 31.