Need Help Specifically with Step #4. Connect is asking for 3 journal entries on this step: 1.) Record the fair-value adj., 2.)Record any reclassification adj., 3.)Record the sale of the investment by Mills. I have the 3rd entry to record the sale of the investment, but am not sure about the first 2 entries for the fair value adj and reclass. I originally put that there was no entry required for those 2 steps and it is saying that is incorrect.

Mills Corporation acquired as a long-term investment $240 million of 6% bonds, dated July 1, on July 1, 2021. Company management has classified the bonds as an available-for-sale investment. The market interest rate (yield) was 4% for bonds of similar risk and maturity. Mills paid $280 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 $270 million. Required: 1. & 2. Prepare the journal entry to record Mills investment in the bonds on July 1, 2021 and interest on December 31, 2021, at the effective (market) rate. 3. At what amount will Mills report its investment in the December 31, 2021, balance sheet? 4. Suppose Moodys bond rating agency upgraded the risk rating of the bonds, and Mills decided to sell the investment on January 2, 2022, for $290 million. Prepare the journal entries required on the date of sale.

Suppose Moody's bond rating agency upgraded the risk rating of the bonds, and Mills decided to sell the investment on January 2, 2022, for $290 million. Prepare the journal entries required on the date of sale. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field. Enter your answers in millions rounded to 1 decimal place, (i.e., 5,500,000 should be entered as 5.5).) Show less View transaction list Journal entry worksheet Record the fair-value adjustment. Note: Enter debits before credits. Date General Journal January 02, 2022 No journal entry required Debit Credit Record entry Clear entry View general journal Suppose Moody's bond rating agency upgraded the risk rating of the bonds, and Mills decided to sell the investment on January 2, 2022, for $290 million. Prepare the journal entries required on the date of sale. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field. Enter your answers in millions rounded to 1 decimal place, (i.e., 5,500,000 should be entered as 5.5).) Show less View transaction list Journal entry worksheet Record any reclassification adjustment. Note: Enter debits before credits. Debit Credit Date General Journal January 02, 2022 No journal entry required Record entry Clear entry View general journal Suppose Moody's bond rating agency upgraded the risk rating of the bonds, and Mills decided to sell the investment on January 2, 2022, for $290 million. Prepare the journal entries required on the date of sale. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field. Enter your answers in millions rounded to 1 decimal place, i.e., 5,500,000 should be entered as 5.5).) Show less View transaction list Journal entry worksheet Record the sale of the investment by Mills. Note: Enter debits before credits. Credit Debit 290.0 Date General Journal January 02, 2022 Cash Gain on investment (NI) Premium on bond investment Investment in bonds 11.6 38.4 240.0 Record entry Clear entry View general journal