Answer and Explanation:
The Journal entries are shown below:-
1. Investment in bond Dr, $330 million
To Cash $300 million
To Discount on bond investment $30 million
(Being investment in bond is recorded)
2. Cash Dr, $8.25 million ($330 million × 5% × 6 ÷ 12)
Discount on bond investment Dr, $0.75 million
To Interest revenue $9 million ($300 million × 6% × 6 ÷ 12)
(Being recognition of bond interest and discount is recorded)
3. The computation of investment is shown below:-
Investment = $300 million + $0.75 million
= $300.75 million
4. The journal entry is shown below:-
Cash Dr, $290 million
Discount on bond inventment Dr, $29.25 million
Loss on sale of investment Dr, $10.75 million
To inventment in bond $330 million
(Being sale of investment is recorded)