Subject :- Account Mills Corporation acquired as a long-term investment $260 million of 7% bonds, dated July 1, on July 1, 2024. Company managementhas classified the bonds as an available for sale investment. The market interest rate (yield) was 5% for bonds of similar risk andmaturity. Mills paid $320 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 $300 millionRequired:1. & 2. Prepare the journal entry to record Mils 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 22025, for $330 million. Prepare the journal entries required on the date of saleAnswer is not complete.Complete this question by entering your answers in the tabs below.Req 1 and 2Rey 4OAt what amount will Mils report its investment in the December 31, 2024, balance sheet?Note: Do not round intermediate calculations. Enter your answer in millions rounded to 1 decimal place, (.e, 5,500,000should be entered as 5.5).330 millionReq3 ressure eve4. Suppose Moody's bond rating agency upgraded the risk rating of the bonds, and Mills decided to sell the investment on January 22025, for $330 milion. Prepare the journal entries required on the date of saleAnswer is not complete.Complete this question by entering your answers in the tabs below.Req 1 and 2Req3NoSuppose Moody's bond rating agency upgraded the risk rating of the bonds, and Miis decided to sell the investment onJanuary 2, 2025, for $330 milion. Prepare the journal entries required on the date of 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, (ie, 5,500,000 should be entered as5.5).Show lessReg 4DateJanuary 02, 2025 CashGeneral JournalInvestment in bondsPremium on bond investmentRetained eamings(Req3R4Debit330.0Credit260.05911:

long-term investment: An account that a business intends to hold for at minimum a year, such as…

Mills Corporation acquired as a long-term investment $260 million of 7% bonds, dated July 1, on July 1, 2024 Company management has classified the bonds as an available for sale investment. The market interest rate yield) was 5% for bonds of similar risk and maturity Mills paid $320 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 $300 million Required: 1.4 2. Prepare the journal entry to record Mils' 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 $330 million. Prepare the journal entries required on the date of sale

Mills Corporation acquired as a long-term investment $260 million of 7% bonds, dated July 1, on July 1, 2024 Company management has classified the bonds as an available for sale investment. The market interest rate yield) was 5% for bonds of similar risk and maturity Mills paid $320 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 $300 million Required: 1.4 2. Prepare the journal entry to record Mils' 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 $330 million. Prepare the journal entries required on the date of 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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Concept explainers

Consolidation

Consolidation in general examination implies an asset oscillating between well-defined methods of trading status. Consolidation is commonly known as market indecisiveness, which completes when the asset's values move forward or backward the trading structure.

Question

Subject :- Account

Mills Corporation acquired as a long-term investment $260 million of 7% bonds, dated July 1, on July 1, 2024. Company management
has classified the bonds as an available for sale investment. The market interest rate (yield) was 5% for bonds of similar risk and
maturity. Mills paid $320 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 $300 million
Required:
1. & 2. Prepare the journal entry to record Mils 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 $330 million. Prepare the journal entries required on the date of sale
Answer is not complete.
Complete this question by entering your answers in the tabs below.
Req 1 and 2
Rey 4
O
At what amount will Mils report its investment in the December 31, 2024, balance sheet?
Note: Do not round intermediate calculations. Enter your answer in millions rounded to 1 decimal place, (.e, 5,500,000
should be entered as 5.5).
330 million
Req3

ressure eve
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 $330 milion. Prepare the journal entries required on the date of sale
Answer is not complete.
Complete this question by entering your answers in the tabs below.
Req 1 and 2
Req3
No
Suppose Moody's bond rating agency upgraded the risk rating of the bonds, and Miis decided to sell the investment on
January 2, 2025, for $330 milion. Prepare the journal entries required on the date of sale.
Note: If no entry is required for a transaction/event, select "No journal entry required" in the first account field. Do not round
intermediate calculations. Enter your answers in millions rounded to 1 decimal place, (ie, 5,500,000 should be entered as
5.5).
Show less
Reg 4
Date
January 02, 2025 Cash
General Journal
Investment in bonds
Premium on bond investment
Retained eamings
(Req3
R4
Debit
330.0
Credit
260.0
59
11:

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