Federal Semiconductors issued 11% bonds, dated January 1, with a face amount of $830 milion on January 1, 2021. The bonds sold for $767,557,868 and mature on December 31, 2040 20 years). For bonds of similar risk and maturity the market yield was 123. Interestis 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 $750 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 $756 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. Calculation General Journal Prepare the journal entries to adjust the bonds to their fair value for presentation in the December 31, 2021, balance sheet, 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.) Show less General Journal Debit No Date 46.053472 1 June 30, 2021 Interest expense Discount on bonds payable 403,472 Date June 30, 2021 General Jour Interest expense Discount on bonds payable Doble 46,053472 Credit Cash 403,472 45,650,000 December 31, 202 Interest expense Discount on bonds payable Cash 46,077.680 427 680 45.650,000 December 31, 202 Fair value adjustment Gain on bonds payable (urrealized, OCI) 18,389,020 18.389,020 June 30, 2022 46,103,341 Interest expense Discount on bonds payable Cash 453,341 45,650,000 December 31, 202 Interest expense Discount on bonds payable 46,130,542 480,542 Cash 45,650,000 (2,533,059) December 31, 202 Gain on bonds payable (unrealized, OCI) Gain on bonds payable (unrealized, NI) (5,066, 117)
