Exercise 12-6 (Algo) Trading securities [LO12-1, 12-3] Mills Corporation acquired as an investment $220 million of 6% bonds, dated July 1, on July 1, 2024. Company management is holding the bonds in its trading portfolio. The market interest rate (yield) was 4% for bonds of similar risk and maturity. Mills paid $260 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, 2024, was $240 million. Required: 1. & 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. 3. Prepare the journal entry by Mills to record any fair value adjustment necessary for the year ended December 31, 2024. 4. 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 $272 million. Prepare the journal entries required on the date of sale. Answer is not complete. Complete this question by entering your answers in the tabs below. Req 1 and 2 Req 3 Req 4 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. Note: If no entry is required for a transaction/event, select "No journal entry required" in the first account field. Do not round intermediate calculations. Enter your answers in millions rounded to 1 decimal place, (i.e., 5,500,000 should be entered as 5.5). No 1 Date July 01, 2024 General Journal Investment in bonds Cash 2 December 31, 2024 Cash Interest revenue Premium on bond investment < Req 1 and 2 Req 3 > Show less Debit Credit 260.0 260.0 6.6 5.2 1.4 Answer is not complete. Complete this question by entering your answers in the tabs below. Req 1 and 2 Req 3 Req 4 Prepare the journal entry by Mills to record any fair value adjustment necessary for the year ended December 31, 2024. Note: If no entry is required for a transaction/event, select "No journal entry required" in the first account field. Do not round intermediate calculations. Enter your answers in millions rounded to 1 decimal place, (i.e., 5,500,000 should be entered as 5.5). No Date General Journal 1 December 31, 202 No journal entry required < Req 1 and 2 Req 4 > Show less Debit Credit Answer is not complete. 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, 2025, for $272 million. Prepare the journal entries required on the date of sale. Note: If no entry is required for a transaction/event, select "No journal entry required" in the first account field. Do not round intermediate calculations. Enter your answers in millions rounded to 1 decimal place, (i.e., 5,500,000 should be entered as 5.5). No 1 Date January 02, 2025 No journal entry required 2 January 02, 2025 Cash Investment in bonds General Journal Premium on bond investment Gain on investment (unrealized, NI) < Req 3 Req 4 Show less Debit Credit 272.0 220.0 38.6 13.4