Check B Exercise 12-6 (Algo) Trading securities (L012-1, 12-3) Mills Corporation acquired as an investment $200 million of 7% bonds, dated July 1, on July 1, 2021. Company management is holding the bonds in its trading portfolio. The market interest rate yield) was 5% for bonds of similar risk and maturity. Mills paid $240 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 Mills investment in the bonds on July 1, 2021 and interest on December 31, 2021, at the effective (market) rate. 3. Prepare the journal entry by Mills to record any fair value adjustment necessary for the year ended December 31, 2021. 4. Suppose Moody's bond rating agency upgraded the risk rating of the bonds, and Mills decided to sell the investment on January 2, 2022 for $250 million. Prepare the journal entries required on the date of sale. Book erences Complete this question by entering your answers in the tabs below. Req 1 and 2 Req3 Reg 4 Prepare the journal entry by Mills to record any fair value adjustment necessary for the year ended December 31, 2021. (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, (.., 5,500,000 should be entered as 5.5).) View transaction list Journal entry worksheet 1 > Prepare any journal entry needed to adjust the investment to fair value. SEW MacBook Pro Help Save & Exit Submit Check my work Prepare the journal entry by Mills to record any fair value adjustment necessary for the year ended December 31, 2021. (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).) View transaction list Journal entry worksheet > Prepare any journal entry needed to adjust the investment to fair value. Note: Enter debits before credits General Journal Debit Credit Date December 31 2021 Fair value adjustment No journal entry required Cash Discount on bond investment Fair value adjustment Gain on Investment (NI) View general Journal Record entr Reg 1 and 2 Rag 4 > MacBook Pro Prepare the journal entry by Mills to record any fair value adjustment necessary for the year ended December 31, 2021. (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, (l.e., 5,500,000 should be entered as 5.5).) View transaction list Journal entry worksheet 1 Prepare any journal entry needed to adjust the investment to fair value. Note: Enter debits before credits Debit Credit Date General Journal December 31. Fair value adjustment 2021 Discount on bond investment Gain on investment (unrealized, NI) Gain on investment (unrealized, OCI) Insurance expense Interest receivable Interest revenue Record entr View general Journal Summer Saved Help Save & Exit Submit Check my work Journal entry worksheet 1 > Prepare any journal entry needed to adjust the investment to fair value. Note: Enter debits before credits Date General Journal Debit Credit December 31. Fair valued 2021 ances Discount on bond investment Gain on investment (NI) Interest revenue Loss on investment (NI) Loss on investment (unrealized, NI) Loss on investment (unrealized, OCI) Retained earnings Record entre View general Journal MacBook Pro Check my work Req 1 and 2 Reg 3 Req 4 Suppose Moody's bond rating agency upgraded the risk rating of the bonds, and Mills decided to sell the investment on January 2, 2022, for $250 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, (.e., 5,500,000 should be entered as 5.5).) Show less View transaction list Journal entry worksheet 1 > Prepare any journal entry needed to adjust the investment to fair value os Note: Enter debits before credits General Journal Debit Credit Date January 02 2022 No journal entry required Cash Discount on bond investment Fair value adjustment Gain on investment (NI) View general Journal Recordent MacBook Pro eq 1 and 2 Reg 3 Check my work Reg 4 suppose Moody's bond rating agency upgraded the risk rating of the bonds, and Mills decided to sell the investment on January 2, 2022, er $250 million. Prepare the journal entries required on the date of sale. (If no entry is required for a transaction/event, select "No murnal entry required in the first account field. Enter your answers in millions rounded to 1 decimal place, (.e., 5,500,000 should be ntered as 5.5).) Show less View transaction list Journal entry worksheet Prepare any journal entry needed to adjust the investment to fair value. Note: Enter debits before credits General Journal Debit Credit Date January 02 2022 Gain on investment (unrealized, NI) Gain on investment (unrealized, OCI) Insurance expense Interest receivable Interest revenue Investment in honde View general Journal Record ent MacBook Pro Du IN OG SVO Help Save & Exit Submit Check my work Show less View transaction ist Journal entry worksheet 1 > Prepare any journal entry needed to adjust the investment to fair value. Note: Enter debits before credits General Journal Debit Credit Date January 02 2022 Loss on investment (NI) Loss on investment (unrealized, NI) Loss on investment (unrealized, OCI) Premium on bond investment Retained earnings Record en View general journal Rega MacBook Pro Du 88 3 80 26 FY mer Help Save & Exit Submit Check my work Journal entry worksheet Record the sale of the investment by Mils. Note: Enter debits before credits General Journal Debit Credit Date January 02, 2022 Record entry Clear entry View general Journal MacBook Pro Bo Du DO
