Please PAY ATTENTION to dates.

Federal Semiconductors issued 8% bonds, dated January 1, with a face amount of $750 million on January 1, 2016. The bonds sold for $680,994,058 and mature on December 31, 2032 (20 years). For bonds of similar risk and maturity the market yield was 9%. Interest is paid semiannually on June 30 and December 31. Federal determines interest at the effective rate. Federal elected the option to report these bonds at their fair value. On December 31, 2016, the fair value of the bonds was $670 million as determined by their market value in the over-the-counter market. Assume the fair value of the bonds on December 31, 2017 had risen to $676 million.

1. Record the fair value adjustment. December 31, 2017