Mills Corporation acquired as a long-term Investment $240 million of 8% bonds, dated July 1, on July 1, 2024. Company managementhas the positive intent and ability to hold the bonds until maturity. The market Interest rate (yield) was 6% for bonds of similar risk andmaturity. Mills paid $280.0 million for the bonds. The company will receive interest semiannually on June 30 and December 31. As aresult of changing market conditions, the fair value of the bonds at December 31, 2024, was $265.0 million.Required:1. & 2. Prepare the Journal entry to record Mills Investment in the bonds on July 1, 2024 and Interest on December 31, 2024, at theeffective (market) rate.3. At what amount will Mills report Its Investment in the December 31, 2024, balance sheet?4. Suppose Moody's bond rating agency upgraded the risk rating of the bonds, and Mills decided to sell the investment on January 2,2025, for $292 million. Prepare the journal entry to record the sale.Complete this question by entering your answers in the tabs below.Req 1 and 2Prepare the journal entry to record Mills' investment in the bonds on July 1, 2024 and interest on December 31, 2024, at theeffective (market) rate.Note: If no entry is required for a transaction/event, select "No journal entry required" in the first account field. Do not roundintermediate calculations. Enter your answers in millions rounded to 1 decimal place, (i.e., 5,500,000 should be entered as5.5).No12Req 3> Answer is complete but not entirely correct.DateJuly 01, 2024Req 4Investment in bondsDecember 31, 2024 CashGeneral JournalPremium on bond investmentCashPremium on bond investmentInterest revenue< Req 1 and 2Req 3 >33 3› › ›✔Debit240.040.0✔7.2 XShow lessCredit280.0✔5.6 x1.6 X Mills Corporation acquired as a long-term Investment $240 million of 8% bonds, dated July 1, on July 1, 2024. Company managementhas the positive intent and ability to hold the bonds until maturity. The market Interest rate (yleld) was 6% for bonds of similar risk andmaturity. Mills paid $280.0 million for the bonds. The company will receive Interest semiannually on June 30 and December 31. As aresult of changing market conditions, the fair value of the bonds at December 31, 2024, was $265.0 million.Required:1. & 2. Prepare the journal entry to record Mills' Investment in the bonds on July 1, 2024 and Interest on December 31, 2024, at theeffective (market) rate.3. At what amount will Mills report Its Investment in the December 31, 2024, balance sheet?4. Suppose Moody's bond rating agency upgraded the risk rating of the bonds, and Mills decided to sell the investment on January 2,2025, for $292 million. Prepare the journal entry to record the sale.Complete this question by entering your answers in the tabs below.Req 1 and 2Suppose Moody's bond rating agency upgraded the risk rating of the bonds, and Mills decided to sell the investment on January2, 2025, for $292 million. Prepare the journal entry to record the sale.Note: If no entry is required for a transaction/event, select "No journal entry required" in the first account field. Do not roundintermediate calculations. Enter your answers in millions rounded to 1 decimal place, (i.e., 5,500,000 should be entered as5.5).Show lessNo12Req 3Answer is complete but not entirely correct.Req 4January 02, 2025 CashDateJanuary 02, 2025 No journal entry requiredGeneral JournalPremium on bond investmentInvestment in bondsGain on investments (NI)< Req 3Req 4Debit290.0 XCredit240.0 X38.2 x11.8 x

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Mills Corporation acquired as a long-term Investment $240 million of 8% bonds, dated July 1, on July 1, 2024. Company management has the positive intent and ability to hold the bonds until maturity. The market Interest rate (yleld) was 6% for bonds of similar risk and maturity. Mills pald $280.0 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, 2024, was $265.0 million. Required: 1. & 2. Prepare the Journal entry to record Mills Investment in the bonds on July 1, 2024 and Interest on December 31, 2024, at the effective (market) rate. 3. At what amount will Mills report Its Investment in the December 31, 2024, balance sheet? 4. Suppose Moody's bond rating agency upgraded the risk rating of the bonds, and Mills decided to sell the investment on January 2, 2025, for $292 million. Prepare the journal entry to record the sale.

Mills Corporation acquired as a long-term Investment $240 million of 8% bonds, dated July 1, on July 1, 2024. Company management has the positive intent and ability to hold the bonds until maturity. The market Interest rate (yleld) was 6% for bonds of similar risk and maturity. Mills pald $280.0 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, 2024, was $265.0 million. Required: 1. & 2. Prepare the Journal entry to record Mills Investment in the bonds on July 1, 2024 and Interest on December 31, 2024, at the effective (market) rate. 3. At what amount will Mills report Its Investment in the December 31, 2024, balance sheet? 4. Suppose Moody's bond rating agency upgraded the risk rating of the bonds, and Mills decided to sell the investment on January 2, 2025, for $292 million. Prepare the journal entry to record the sale.

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Hello, Can you assist with questions attached, thanks much.
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