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Mills Corporation acquired as an investment $ 2 4 5 million of 8 % bonds, dated July 1 , on July 1 , 2 0
Mills Corporation acquired as an investment $ million of bonds, dated July on July Company management is holding the bonds in its trading portfolio. The market interest rate yield was for bonds of similar risk and maturity. Mills paid $ million for the bonds. The company will receive interest semiannually on June and December As a result of changing market conditions, the fair value of the bonds at December was $ million.
Required:
& Prepare the journal entry to record Mills investment in the bonds on July and interest on December at the effective market rate.
Prepare the journal entry by Mills to record any fair value adjustment necessary for the year ended December
Suppose Moodys bond rating agency upgraded the risk rating of the bonds, and Mills decided to sell the investment on January for $ million. Prepare the journal entries required on the date of sale.
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