FINANCIAL ACCOUNTING
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Mills Corporation acquired as a long-term investment $250 million of 8% bonds, dated July 1, on July 1, 2021. Company management has classified the bonds as an available-for-sale investment. The market interest rate (yield) was 6% for bonds of similar risk and maturity. Mills paid $290 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
Required:
1. & 2. Prepare the
3. At what amount will Mills report its investment in the December 31, 2021,
4. Suppose Moody's bond rating agency upgraded the risk rating of the bonds, and Mills decided to sell the investment on January 2, 2022, for $300 million. Prepare the journal entries required on the date of sale.
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Hi it says wrong. I had 288.7 also but idk please give formula
Transcribed Image Text:SCC Fa22 ACCT 104 LEC 17842 C X
Question 1- CH 12 practice prob X C Mills Corporation acquired as a lc X b Answered: Mills Corporation acqu X +
✰ ezto.mheducation.com/ext/map/index.html?_con=con&external_browser=0&launchUrl=https%253A%252F%252Flms.mheducation.com%252Fmghmiddleware%252Fmheproducts%252FlmsC... L
CH 12 practice problem
83°F
Sunny
1
Mc
Graw
Hill
Complete this question by entering your answers in the tabs below.
Req 1 and 2
No
1
Check my work mode: This shows what is correct or incorrect for the work you have completed so far. It does not indicate completion.
3
Req 3
Suppose Moody's bond rating agency upgraded the risk rating of the bonds, and Mills decided to sell the investment on
January 2, 2022, for $300 million. Prepare the journal entries required on the date of sale. (If no entry is required for a
transaction/event, select "No journal entry required" in the first account field. Enter your answers in millions rounded to 1
decimal place, (i.e., 5,500,000 should be entered as 5.5).)
Date
January 02, 2022
January 02, 2022
Req 4
Cash
Answer is not complete.
General Journal
Fair value adjustment
Gain on investment (unrealized, NI)
Gain on investment (NI)
Premium on bond investment
Investment in bonds
Saved
< Req 3
H
Req 4 >
< Prev
>>
♥
✔
✓
1 of 1
H
Debit
30.0✔
300.0
Credit
Show less
Next >
30.0✔
11.3✓
38.7✔
250.0✔
Help
Save & Exit
Submit
Return to question
7:16 PM
9/16/2022
X
:
Transcribed Image Text:SCC Fa22 ACCT 104 LEC 17842 C X
Question 1- CH 12 practice prob X C Mills Corporation acquired as a lc X b Answered: Mills Corporation acqu X +
✰ ezto.mheducation.com/ext/map/index.html?_con=con&external_browser=0&launchUrl=https%253A%252F%252Flms.mheducation.com%252Fmghmiddleware%252Fmheproducts%252FlmsC... L
CH 12 practice problem
83°F
Sunny
Mc
Graw
Hill
1
Required:
1. & 2. Prepare the journal entry to record Mills' investment in the bonds on July 1, 2021 and interest on December 31, 2021, at the
effective (market) rate.
3. At what amount will Mills report its investment in the December 31, 2021, 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,
2022, for $300 million. Prepare the journal entries required on the date of sale.
Check my work mode: This shows what is correct or incorrect for the work you have completed so far. It does not indicate completion.
Complete this question by entering your answers in the tabs below.
Req 1 and 2
Req 3
Req 4
Saved
X Answer is not complete.
At what amount will Mills report its investment in the December 31, 2021, balance sheet?
Investment $ 288 million
< Req 1 and 2
Req 4 >
< Prev
1 of 1
H
—
Help
Next >
Save & Exit
Submit
Return to question
7:16 PM
9/16/2022
X
:
Solution
by Bartleby Expert
Follow-up Questions
Read through expert solutions to related follow-up questions below.
Follow-up Question
Hi it says wrong. I had 288.7 also but idk please give formula
Transcribed Image Text:SCC Fa22 ACCT 104 LEC 17842 C X
Question 1- CH 12 practice prob X C Mills Corporation acquired as a lc X b Answered: Mills Corporation acqu X +
✰ ezto.mheducation.com/ext/map/index.html?_con=con&external_browser=0&launchUrl=https%253A%252F%252Flms.mheducation.com%252Fmghmiddleware%252Fmheproducts%252FlmsC... L
CH 12 practice problem
83°F
Sunny
1
Mc
Graw
Hill
Complete this question by entering your answers in the tabs below.
Req 1 and 2
No
1
Check my work mode: This shows what is correct or incorrect for the work you have completed so far. It does not indicate completion.
3
Req 3
Suppose Moody's bond rating agency upgraded the risk rating of the bonds, and Mills decided to sell the investment on
January 2, 2022, for $300 million. Prepare the journal entries required on the date of sale. (If no entry is required for a
transaction/event, select "No journal entry required" in the first account field. Enter your answers in millions rounded to 1
decimal place, (i.e., 5,500,000 should be entered as 5.5).)
Date
January 02, 2022
January 02, 2022
Req 4
Cash
Answer is not complete.
General Journal
Fair value adjustment
Gain on investment (unrealized, NI)
Gain on investment (NI)
Premium on bond investment
Investment in bonds
Saved
< Req 3
H
Req 4 >
< Prev
>>
♥
✔
✓
1 of 1
H
Debit
30.0✔
300.0
Credit
Show less
Next >
30.0✔
11.3✓
38.7✔
250.0✔
Help
Save & Exit
Submit
Return to question
7:16 PM
9/16/2022
X
:
Transcribed Image Text:SCC Fa22 ACCT 104 LEC 17842 C X
Question 1- CH 12 practice prob X C Mills Corporation acquired as a lc X b Answered: Mills Corporation acqu X +
✰ ezto.mheducation.com/ext/map/index.html?_con=con&external_browser=0&launchUrl=https%253A%252F%252Flms.mheducation.com%252Fmghmiddleware%252Fmheproducts%252FlmsC... L
CH 12 practice problem
83°F
Sunny
Mc
Graw
Hill
1
Required:
1. & 2. Prepare the journal entry to record Mills' investment in the bonds on July 1, 2021 and interest on December 31, 2021, at the
effective (market) rate.
3. At what amount will Mills report its investment in the December 31, 2021, 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,
2022, for $300 million. Prepare the journal entries required on the date of sale.
Check my work mode: This shows what is correct or incorrect for the work you have completed so far. It does not indicate completion.
Complete this question by entering your answers in the tabs below.
Req 1 and 2
Req 3
Req 4
Saved
X Answer is not complete.
At what amount will Mills report its investment in the December 31, 2021, balance sheet?
Investment $ 288 million
< Req 1 and 2
Req 4 >
< Prev
1 of 1
H
—
Help
Next >
Save & Exit
Submit
Return to question
7:16 PM
9/16/2022
X
:
Solution
by Bartleby Expert
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