Business, 19.05.2021 19:10 jalexus

Zooey Inc. issued 8% bonds with a face of $760,000,000 for $696,000,000 cash on January 1, 2021, when the market effective rate was 10%. Zooey pays interest semiannually on June 30 and December 31, records interest at the effective rate, and elected the option to report these bonds at their fair value at year-end, 12/31. There was no change in rates during the first 6 months of 2021. On December 31, 2021, the fair value of the bonds was $712,000,000, and $1,000,000 of the increase in fair value was due to a change in the general (risk-free) rate of interest. Required:
1. Record the first interest payment on June 30, 2021.
2. Record the second interest payment on on December 31, 2021.
3. Record the fair value adjustment on December 31, 2021.

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Zooey Inc. issued 8% bonds with a face of $760,000,000 for $696,000,000 cash on January 1, 2021, whe...

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