Exercise $14-29($Algo$)$ Reporting bonds at fair value $[$LO$14-6]$

Federal Semiconductors issued $11\%$ bonds, dated January $1,$ with a face amount of $$830$ million on January $1,2024.$

The bonds sold for $$767,557,868$ and mature on December $31,2043(20$ years$).$

For bonds of similar risk and maturity the market yield was $12\%.$

Interest is paid semiannually on June $30$ and December $31.$

Federal determines interest at the effective rate.

Federal elected the option to report these bonds at their fair value.

On December $31,2024,$ the fair value of the bonds was $$750$ million as determined by their market value in the over$-$the$-$counter market

Assume the fair value of the bonds on December $31,2025,$ had risen to $$756$ million.

Required:

Complete the below table to record the following journal entries.

& $2.$ Prepare the journal entries to record interest on June $30,2024,$ December $31,2024,$ and adjust the bonds to their fair value for presentation in the December $31,2024$ balance sheet, and record interest on June $30,2025,$ December $31,2025,$ and adjust the bonds to their fair value for presentation in the December $31,2025,$ balance sheet. Federal determined that none of the change in fair value in $2024$ was due to a decline in general interest rates and one$-$half of the increase in fair value in $2025$ was due yo decline in general interest rates.

Complete this question by entering your answers in the tabs below.

Calculation

General

Journal

Complete the below table to determine the amounts for the journal entries.

Note: Negative amount should be indicated by a minus sign. Round intermediate calculations and final answers to the nearest whole dollars,

$\backslash$table$[[\backslash$table$[[$Semiannual$],[$Interest$],[$Period$-$End$]],\backslash$table$[[$Cash Interest$],[$Paid$]],\backslash$table$[[$Bond Interest$],[$Expense$]],\backslash$table$[[$Increase in$],[$Balance$]],$Carrying Value,Fair Value,$\backslash$table$[[$Fair value$],[$adjustment$],[$balance needed$]],\backslash$table$[[$Increase$],[($decrease$)],[$in Fair value$],[$adjustment$]]],[\backslash$table$[[\frac{01}{01}\frac{?}{2024}$