Exercise $12-11($Algo$)$ Available$-$for$-$sale securities; financial statement effects $[$L$012-1,12-4]$

Mills Corporation acquired as a long$-$term Investment $$220$ million of $6\%$ bonds, dated July $1,$ on July $1,2024.$ Company management

has classified the bonds as an available$-$for$-$sale investment. The market interest rate $($yleld$)$ was $4\%$ for bonds of similar risk and

maturity. Mills pald $$270$ million for the bonds. The company will recelve interest semlannually on June $30$ and December $31.$ As a

result of changing market conditions, the falr value of the bonds at December $31,2024,$ was $$250$ million.

Requlred:

& $2.$ Prepare the Journal entry to record Mills' Investment in the bonds on July $1,2024$ and interest on December $31,2024,$ at the

effective $($market$)$ rate.

At what amount will Mills report its investment in the December $31,2024,$ balance sheet?

Suppose Moody's bond rating agency upgraded the risk rating of the bonds, and Mills decided to sell the investment on January $2,$

$2025,$ for $$280$ 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 $2$

At what amount will Mills report its investment in the December $31,2024,$ balance sheet?

Note: Do not round intermediate calculations. Enter your answer in millions rounded to $1$ decimal place, $($i$.$e$.,5,500,000$

should be entered as $5\mathrm{.}5).$