Question
Mills Corporation acquired as a long-term investment $260 million of 6% bonds, dated July 1, on July 1, 2021. Company management has the positive intent
Mills Corporation acquired as a long-term investment $260 million of 6% bonds, dated July 1, on July 1, 2021. Company management has the positive intent and ability to hold the bonds until maturity. The market interest rate (yield) was 4% for bonds of similar risk and maturity. Mills paid $300.0 million for the bonds. The company will receive interest semiannually on June 30 and December 31. As a result of changing market conditions, the fair value of the bonds at December 31, 2021, was $280.0 million.
What would be the journal entry needed to adjust the investment to fair value as of January 2, 2022?
No General Journal Debit Credit Date January 02, 2022 1 No Transaction Recorded
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