Answer:
Journal Entries are given below
Explanation:
Mills Corporation-journal Entries
Date Particulars Debit (In Miln) Credit (in Mln)
01-Jul-21 Bond Investment $290.00
Investment premium $50.00
Cash $340.00
Investment recorded
31-Dec-21 Cash ($290 * 8% * 6/12) $11.60
Premium bond investment $1.40
Interest revenue ($340*6%*6/12) $10.20
Revenue recognized for bond interest and amortization of discount.
31-Dec-21 Unrealized holding gain or loss $8.60
Fair value adjustment ($340 - $330 - $1.40) $8.60
investment recorded at fair value.
02-Jan-19 Fair value adjustment Dr $8.60
Reclassification adjustment - $8.60
Fair value adjustment at the time of sale
02-Jan-19 Cash $290.00
Loss on sale of investment $48.60
bond investment premium $48.60
Investment in Bond $290.00
Sale of investment.
