Milis Corporation acquired as a long$-$term investment $$260$ million of $7\%$ bonds, dated July $1,$ on July $1,2024.$ Company management has classified the bonds as an avaliable$-$for$-$sale investment. The market interest rate $($yleld$)$ was $5\%$ for bonds of similar risk and maturity. Mills paid $$320$ mililion for the bonds. The company will recelve interest semiannually on June $30$ and December $31.$ As a resuit of changing market conditions, the fair value of the bonds at December $31,2024,$ was $$300$ million.

Required:

& $2.$ 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.

At what amount will Mills report its investment in the December $31,2024,$ balance sheet?

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 $$330$ million. Prepare the journal entries required on the date of sale.

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Pea $1$ and $2$

Prepare the journal entry to record Mills' investment in the bonds on July $1,2024$ and interest on December $31,2024,$ at the affective $($market$)$ rate.