Exercise 12-11 (Algo) Available-for-sale securities [LO12-1, 12-4] Mills Corporation acquired as a long-term investment $245 million of 8% bonds, dated July 1, on July 1, 2021. Company management has classified the bonds as an available-for-sale Investment. The market interest rate (yield) was 6% for bonds of similar risk and maturity. Mills paid $280 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 $260 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. At what amount will Mills report its investment in the December 31, 2021, balance sheet? 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 $295 million. Prepare the journal entries required on the date of sale. Req 1 and 2 Req 3 Req 4 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. (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, (ie., 5,500,000 should be entered as 5.5).) View transaction list Journal entry worksheet < 1 2 Record Mill's investment in the bonds on July 1, 2021. Note: Enter debits before credits Date July 01, 2021 General Journal Debit Credit > Complete this question by entering your answers in the taus Req 1 and 2 Req 3 Req 4 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. (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 < 1 2 Record Interest on December 31, 2021. Note: Enter debits before credits. Cate December 31 2021 General Journal Debit Credit Complete this question by entering your answers in the tabs below. Req 1 and 2 Req 3 Req 4 At what amount will Mills report its investment in the December 31, 2021, balance sheet? Investment million < Req 1 and 2 Req 4 > Complete this question by entering your answers in the tabs below. Req 1 and 2 Req 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 $295 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, (1.e., 5,500,000 should be entered as 5.5).) Show less A View transaction list Journal entry worksheet < 1 2 3 Record the fair-value adjustment. Note: Enter debits before credits Date January 02, 2022 General Journal Debit Credit Req 1 and 21 Req 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 $295 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, (i.e., 5,500,000 should be entered as 5.5).) Show less A View transaction list Journal entry worksheet < 1 2 3 Record any reclassification adjustment. Note: Enter debits before credits Date January 02, 2022 General Journal Debit Credit Req 1 and 2 Req 3. Req 41 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 $295 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, (i.e., 5,500,000 should be entered as 5.5).) View transaction list Journal entry worksheet < 1 2 3 Record the sale of the investment by Mills. Note: Enter debits before credits. Date January 02, 2022 General Journal Debit Credit Show less A