Excercise $12-11$ Fair value option $($LO $12-4)$

On January $1,20$X$1,$ Tusk Company issued $$300$ million of bonds with a $6\%$ coupon interest rate. The be

mature in $10$ years and pay interest annually on December $31$ of each year. The market rate of interest c

January $1,20\backslash$times $1,$ for bonds of this risk class was $6\%.$ Tusk Company closes its books on December $31.$ T

elected the fair value option under ASU $2016-1$ to account for the bonds. Use the following links to the

value tables to calculate answers. $($PV of $1,$ PVAD of $1,$ and PVOA of $1)($Use the appropriate factor$($s$)$ fro

tables provided.$)$

Required:

What amount will appear for the bonds on Tusk Company's balance sheet on January $1,20$X$1?$

What journal entries will Tusk Company make during $20$X$1$ to record the effects of the bonds if the r

interest rate for these types of bonds is $9\%$ at December $31,20$X$1?$