Required:

& $2.$ 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.

At what amount will Mills report its investment in the December $31,2024,$ balance sheet?

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 $$290$ million. Prepare the journal entries required on the date of sale.

Complete this question by entering your answers in the tabs below.

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 $$290$ million. 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, $($i$.$e$.,5,500,000$ should be entered as $5\mathrm{.}5).$

Journal entry worksheet

$1$

$2$

$3$

Record the fair$-$value adjustment.

Note: Enter debits before credits. Mills Corporation acquired as a long$-$term investment $\backslash (\backslash$$ $240\backslash )$ million of $\backslash (7\backslash \%\backslash )$ bonds, dated July $1,$ on July $1,2024.$ Company management has classified the bonds as an available$-$for$-$sale investment. The market interest rate $($yield$)$ was $\backslash (5\backslash \%\backslash )$ for bonds of similar risk and maturity. Mills paid $\backslash (\backslash$$ $280\backslash )$ 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 $\backslash (\backslash$$ $260\backslash )$ million.

Required:

$1.\backslash$& $2.$ 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 $\backslash (\backslash$$ $290\backslash )$ 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 $2$

At what amount will Mills 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, $($i$.$e$.,5,500,000$ should be entered as $5\mathrm{.}5).$