Fuzzy Monkey Technologies, Inc., purchased as a long-term investment $190 million of 8% bonds, dated January 1, on January 1, 2018. Management intends to have the investment available for sale when circumstances warrant. When the company purchased the bonds, management elected to account for them under the fair value option. For bonds of similar risk and maturity the market yield was 10%. The price paid for the bonds was $169 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, 2018, was $180 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 journal entry necessary to achieve this reporting objective.
5.How would Fuzzy Monkey's 2018 statement of cash flows be affected by this investment assuming Fuzzy anticipates holding these investments for a sufficiently long period?
O ezto.mheducation.com C Tech|Express Homepage - ACCT-3180-001 - Finance.. PowerPoint Christmas List Connect Course Hero Week 11 HW (due Nov 8) i Saved Help Save & Exit Submit Check my work answers in millions rounded to 2 decimal places, (i.e., 5,500,000 should be entered as 5.50).) View transaction list View journal entry worksheet x 0.5 No Date General Journal Debi Credit points January 01, 2018 Investment in bonds 190.00 Discount on bond investment 21.00 Cash 169.00 eBook 2 June 30, 2018 Cash Discount on bond investment Print Interest revenue 8.45 n 3 December 31, References 2018 Cash Discount on bond investment Interest revenue Mc Graw Hill Education O ezto.mheducation.com C Tech|Express Homepage - ACCT-3180-001 - Finance.. PowerPoint Christmas List Connect Course Hero Week 11 HW (due Nov 8) i Saved Help Save & Exit Submit Check my work Fuzzy Monkey Technologies, Inc., purchased as a long-term investment $190 million of 8% bonds, dated January 1, on January 1, 2018. Management intends to have the investment available for sale when circumstances warrant. When the company purchased the bonds, management elected to account for them under the fair value option. For bonds of similar risk and maturity the market yield was 10%. 0.5 The price paid for the bonds was $169 million. Interest is received semiannually on June 30 and December 31. Due to changing market points conditions, the fair value of the bonds at December 31, 2018, was $180 million. Required: 1. to 3. Prepare the relevant journal entries on the respective dates (record the interest at the effective rate). eBook 4-a. At what amount will Fuzzy Monkey report its investment in the December 31, 2018, balance sheet? 4-b. Prepare the journal entry necessary to achieve this reporting objective. 5. How would Fuzzy Monkey's 2018 statement of cash flows be affected by this investment assuming Fuzzy anticipates holding these investments for a sufficiently long period? Print n Complete this question by entering your answers in the tabs below. References Req 1 to 3 Req 4A Req 4B Req 5 Prepare the journal entry necessary to achieve this reporting objective. (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, (i.e., 5,500,000 should be entered as 5.50).) View transaction list View journal entry worksheet No Date General Journal Debit Credit December 31, 2018 Fair value adjustment Unrealized holding gain-NI Mc Graw Hill Education O ezto.mheducation.com C Tech|Express Homepage - ACCT-3180-001 - Finance.. PowerPoint Christmas List Connect Course Hero Week 11 HW (due Nov 8) i Saved Help Save & Exit Submit Check my work The price paid for the bonds was $169 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, 2018, was $180 million. Required: 0.5 1. to 3. Prepare the relevant journal entries on the respective dates (record the interest at the effective rate). points 4-a. At what amount will Fuzzy Monkey report its investment in the December 31, 2018, balance sheet? 4-b. Prepare the journal entry necessary to achieve this reporting objective. 5. How would Fuzzy Monkey's 2018 statement of cash flows be affected by this investment assuming Fuzzy anticipates holding these investments for a sufficiently long period? eBook Complete this question by entering your answers in the tabs below. Print Req 1 to 3 Req 4A Req 4B Req 5 n References How would Fuzzy Monkey's 2018 statement of cash flows be affected by this investment assuming Fuzzy anticipates holding these investments for a sufficiently long period? (Do not round intermediate calculations. Enter your answers in millions rounded to 1 decimal place, (i.e., 5,500,000 should be entered as 5.5).) Operating cash flow million inflow Investing cash flow million outflow Req 4B Req 5 > Mc Graw Hill Education
