80.2K

Verified Solution

Link Copied!

Hi I need help answer the following question thank you

Fuzzy Monkey Technologies, Inc. purchased as a long-term investment $210 million of 6% bonds, dated January 1, on January 1, 2021. Management intends to have the investment available for sale when circumstances warrant. For bonds of similar risk and maturity the market yield was 8%. The price paid for the bonds was $192 million Interest is received semiannually on June 30 and December 31 Due to changing market conditions, the fair value of the bonds at December 31, 2021. was $200 million Required: 1. to 3. Prepare the relevant journal entries on the respective dates (record the Interest at the effective rate). 4-6. At what amount will Fuzzy Monkey report its investment in the December 31, 2021, balance sheet? 4-b. Prepare the entry necessary to achieve this reporting objective 3. How would Fuzzy Monkey's 2021 statement of cash flows be affected by this investment? Of more than one approach is possible. indicate the one that is most likely.) 3 Answer is not complete. Complete this question by entering your answers in the tabs below. Reg 1 to 3 Reg 4A Reg 45 Reqs Prepare the relevant journal entries on the respective dates (record the interest at the effective rate). (If no entry is required for a transaction/event, select "No journal entry required in the first account field. Do not round intermediate calculations. Enter your answers in millions rounded to 2 decimal places (.e., 5.500,000 should be entered as 5.50).) NS Credit 1 Date General Journal January 01, 2021 Investment in bonds Discount on bond investment Cash Debit 210.00 OOO 18.00 10200 2 June 30, 2021 Cash Discount on bond investment Interest revenue 0.00 1.400.00 7,080 00 3 0.300.00 December 31, 203 Cash Discount on bond investment Interest revenue ol Reg 4 >

Answer & Explanation Solved by verified expert

See Answer