ue Saved On January 1, 2021, Rapid Airlines issued $275 million of its 10% bonds for $254 million. The bonds were priced to yield 12%. Interest is payable semiannually on June 30 and December 31. Rapid Airlines records interest at the effective rate and elected the option to report these bonds at their fair value. On December 31, 2021, the fair value of the bonds was $264 million as determined by their market value in the over-the-counter market. Rapid determined that $1,000,000 of the increase in fair value was due to a decline in general interest rates. Required: 1. to 3. Prepare the journal entries to record interest on June 30, 2021(the first interest payment), on December 31, 2021 (the second interest payment) and to adjust the bonds to their fair value for presentation in the December 31, 2021, balance sheet (Enter your answers in whole dollars. If no entry is required for a transaction/event, select "No journal entry required" in the first account field.) View transaction list Journal entry worksheet 1 Record interest on June 30, 2021 (the first interest payment). Note: Enter debits before credits Credit Date June 30, 2021 General Journal Interest expense Discount on bonds payable Cash Debit 15,750,000 200,000 13,750,000 Record entry Clear entry View general journal