Exercise 12-2 Securities held-to-maturity; bond investment, effective interest, premium [L012-1] Mills Corporation acquired as a long-term investment $300 million of 7% bonds, dated July 1, on July 1, 2018, Company management has positive intent and ability to hold the bonds until maturity. The market interest rate (yield) was 5% for bonds of similar risk and maturity. Mills paid $340.0 million for the bonds. The company will receive interest semiannually on June 30 and December 31. Asa result of changing market conditions, the fair value of the bonds at December 31, 2018, was $320.0 million Required 1. & 2. Prepare the journal entry to record Mills' investment in the bonds on July 1, 2018 and interest on December 31, 2018, at the effective (market) rate 3. At what amount will Mills report its investment in the December 31, 2018, 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, 2019, for $352 million. Prepare the journal entry to record the sale Answer is complete but not entirely correct. 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 orn January 2, 2019, for $352 million. Prepare the journal entry to record the 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 0 Event General Journal Debit Credit Cash 352.0 Premium on bond investment Gain on sale of investments Investment in bonds 2.0 50.0 300.0 Req3 Reg 4