Mills Corporation acquired as a long-term investment $300 million of 6% bonds, dated July 1, on July
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1. & 2. Prepare the journal entry to record Mills’ investment in the bonds on July 1, 2018, and interest on December 31, 2018, at the effective (market) rate.
3. At what amount will Mills report its investment in the December 31, 2018, 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, 2019, for $360 million. Prepare the journal entry to record the sale.
Related Book For
Intermediate Accounting
ISBN: 9781259722660
9th Edition
Authors: J. David Spiceland, James Sepe, Mark Nelson, Wayne Thomas
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