Exercise 14-30 (Algo) Reporting bonds at fair value [LO14-6] On January 1, 2024, Rapid Airlines issued $265 million of its 6% bonds for $243 million. The bonds were priced to yield 8%. Interest is payable semiannually on June 30 and December 31. Rapid Airlines records interest at the effective rate and elected the option to report these bonds at their fair value. On December 31, 2024, the fair value of the bonds was $255 million as determined by their market value in the over-the-counter market. Rapid determined that $1,000,000 of the increase in fair value was due to a decline in general interest rates. Required: 1. to 3. Prepare the journal entries to record interest on June 30, 2024 (the first interest payment), on December 31, 2024 (the second interest payment) and to adjust the bonds to their fair value for presentation in the December 31, 2024, balance sheet. Note: Enter your answers in whole dollars. If no entry is required for a transaction/event, select "No journal entry required" in the first account field. Answer is complete but not entirely correct. No Date General Journal 1 June 30, 2024 Interest expense Discount on bonds payable Cash 2 December 31, 202 Interest expense Discount on bonds payable Cash Debit Credit 9,720,000 1,770,000 7,950,000 9,790,800 1,840,800 7,950,000 3 December 31, 202 Loss on bonds payable (unrealized, OCI) Loss on bonds payable (unrealized, NI) 226,089,600 1,000,000 Fair value adjustment 227,089,600