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On January 1 , 2 0 2 4 , Rapid Airlines issued $ 2 7 5 million of its 1 0 % bonds for $
On January Rapid Airlines issued $ million of its bonds for $ million.
The bonds were priced to yield
Interest is payable semiannually on June and December
Rapid Airlines records interest at the effective rate and elected the option to report these bonds at their fair value.
On December the fair value of the bonds was $ million as determined by their market value in the overthecounter market.
Rapid determined that $ of the increase in fair value was due to a decline in general interest rates.
Required:
to Prepare the journal entries to record interest on June the first interest payment on December the second interest payment and to adjust the bonds to their fair value for presentation in the December balance sheet.
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