Exercise 14-30 On January 1, 2021, Rapid Airlines issued $225,000,000 of its 8% bonds for $207,000,000. The bonds were priced to yield 10%. 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, 2021, the fair value of the bonds was $213,000,000 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. Prepare the necessary journal entries on the dates shown below. Debit Credit Interest expense (effective interest method) Date Account | 6/30/21 Discount on Bonds Payable Debit Credit Interest expense (effective interest method) Date Account 12/31/21 Discount on Bonds Payable Adjust the bonds to their fair value for presentation in the December 31, 2021, balance Date Account Debit Credit | 12/31/21 Fair Value Adjustment