Reference no: EM132732238
Question - Mills Corporation acquired as a long-term investment $280 million of 6% bonds, dated July 1, on July 1, 2018. Mills determined that it should account for the bonds as an available-for-sale investment. The market interest rate (yield) was 4% for bonds of similar risk and maturity. Mills paid $330 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, 2018, was $320 million.
Required -
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 $340 million. Prepare the journal entries to record the sale.
Record any reclassification adjustment.
Record the sale of the investment by Mills.
Why do companies survive or failed
: Why do companies survive or failed? Identify and describe the consumer buying influences and process to get better understanding of consumer behavior.
|
Compute the Bobby net rent income or loss
: Bobby incurred the following expenses: mortgage interest, $4,600; real estate taxes, $2,300; Compute the Bobby net rent income or loss
|
Community based nursing
: How often have you come across the terms public health nursing, community health nursing, and community based nursing in your environment?
|
Describe the complete actions of muscular contraction
: Why does the urine normally lack many proteins and carbohydrates? Under what conditions may these substances infrequently appear in the urine?
|
Prepare the journal entries to record the sale
: Mills decided to sell the investment on January 2, 2019, for $340 million. Prepare the journal entries to record the sale
|
Community health nursing: new regulations
: Identify a new law or regulation that affects the practice of public health or community health nursing
|
Public health nursing-community health nursing
: How often have you come across the terms public health nursing, community health nursing, and community based nursing in your environment?
|
Which organism is the secondary consumer
: In a typical prairie food web, energy moves from grass to grasshopper to field mouse to fox. Which organism is the secondary consumer?
|
What is the amount of ending inventory
: The net realizable value at year-end was cameras $74, Blu-ray players $66, and iPods $76. What is the amount of ending inventory
|