Federal Semiconductors issued 11% bonds, dated January 1 , with a face amount of $800 million on January 1 , 2021. The bonds sold for $739,814,813 and mature on December 31,2040 (20 years). For bonds of similar risk and maturity the market yield was 12%. Interest is paid semiannually on June 30 and December 31. Federal determines interest at the effective rate. Federal elected the option to report these bonds at their fair value. On December 31, 2021, the fair value of the bonds was $730 million as determined by their market value in the over-the-counter market. Assume the fair value of the bonds on December 31,2022 had risen to $736 million. Required: Complete the below table to record the following journal entries. 1. \& 2. Prepare the journal entries to adjust the bonds to their fair value for presentation in the December 31,2021 , balance sheet, and adjust the bonds to their fair value for presentation in the December 31,2022 , balance sheet. Federal determined that none of the change in fair value in 2021 was due to a decline in general interest rates and one-half of the increase in fair value in 2022 was due to a decline in general interest rates. Answer is not complete. Complete this question by entering your answers in the tabs below. Complete the below table to determine the amounts for the journal entries. (Negative amount should be indicated by a minus sign. Re the nearest whole dollars.) Prepare the journal entries to adjust the bonds to their fair value for presentation in the December 31 , 2021 , balance sheet, and adjust the bonds to their fair value for presentation in the December 31,2022 , balance sheet. Federal determined that none of the change in fair value in 2021 was due to a decline in general interest rates and one-half of the increase in fair value in 2022 was due to a decline in general interest rates. (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.) 1 Record the interest expense. 2 Record the interest expense. 3 Record the entry to adjust the bonds to their fair value for presentation in the December 31,2021 , balance sheet. Federal determined that none of the change in fair value was due to a decline in general interest rates. 4 Record the interest expense. 5 Record the interest expense. 6 Record the entry to adjust the bonds to their fair value for presentation in the December 31, 2022, balance Note : = journal entry has been entered Record the entry to adjust the bonds to their fair value for presentation in the December 31, 2022, balance sheet. Federal determined that one-half of the increase in fair value was due to a decline in general interest rates
