On January 1, 2021, Potter Corporation issued $730 million of its 10% bonds for $666 million. The bonds were priced to yield 12%. Interest is payable semiannually on June 30 and December 31. Potter records interest at the effective rate and elected the option to report these bonds at their fair value. One million dollars of the increase in fair value was due to a change in the general (risk-free) rate of interest. On December 31, 2021, the fair value of the bonds was $682 million as determined by their market value on the NYSE. 1. Prepare the journal entry to record interest on June 30, 2021 (the first interest payment). 2. Prepare the journal entry to record interest on December 31, 2021 (the second interest payment). 3. Prepare the journal entry to adjust the bonds to their fair value for presentation in the December 31, 2021, balance sheet. Complete this question by entering your answers in the tabs below. Prepare the journal entries to record interest on June 30, 2021 (the first interest payment) and December 31, 2021 (the second interest payment) as well as the journal entry to adjust the fair value of the bonds for presentation in the December 31, 2021 balance sheet. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field. Enter your answers in whole dollars.) View transaction list Journal entry worksheet 1 2 3 > Record the interest on June 30, 2021. Note: Enter debits before credits. Date General Journal Debit Credit June 30, 2021 Prepare the journal entries to record interest on June 30, 2021 (the first interest payment) and December 31, 2021 (the second interest payment) as well as the journal entry to adjust the fair value of the bonds for presentation in the December 31, 2021 balance sheet. (IF no entry is required for a transaction/event, select "No journal entry required" in the first account field. Enter your answers in whole dollars.) View transaction list Journal entry worksheet Record the interest on December 31, 2021. Note: Enter debits before credits. General Journal Debit Credit Date December 31. 2021 Prepare the journal entries to record interest on June 30, 2021 (the first interest payment) and December 31, 2021 (the second interest payment) as well as the journal entry to adjust the fair value of the bonds for presentation in the December 31, 2021 balance sheet. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field. Enter your answers in whole dollars.) View transaction list Journal entry worksheet Record the fair value for presentation in the December 31, 2021, balance sheet. Note: Enter debits before credits. General Journal Debit Credit Date December 31, 2021
