50.1K

Verified Solution

Link Copied!

Homework Seved Help Save & Exit Submit Check my work Fuzzy Monkey Technologies, Inc., purchased as a long-term investment $ 60 million of 6% bonds, dated January 1, on January 1, 2018. Management intends to have the investment available for sale when circumstances warrant. For bonds of similar risk and maturity the market yield was 8%. Interest is received semiannually on June 30 and December 31. Due to changing market conditions, the fair value of the bonds at December 31, 2018, was $50 million. Required: 1. to 3. Prepare the relevant journal entries on the respective dates (record the interest at the effective rate). 4-a. At what amount will Fuzzy Monkey report its investment in the December 31, 2018, balance sheet? 4-b. Prepare the entry necessary to achieve this reporting objective. 5. How would Fuzzy Monkey's 2018 statement of cash flows be affected by this investment? Complete this question by entering your answers in the tabs below. Req 1 to 3 Reg 4A Req 4B Req 5 Prepare the relevant journal entries on the respective dates (record the interest at the effective rate). (If no entry is requi transaction/event, select "No journal entry required in the first account field. Do not round intermediate calculations. Ent answers in millions rounded to 2 decimal places, (l.e., 5,500,000 should be entered as 5.50).) View transaction list Journal entry worksheet 2 3

Answer & Explanation Solved by verified expert

See Answer