Answered step by step
Verified Expert Solution
Question
1 Approved Answer
Help with 4A&4B please Problem 12-3 (Algo) Securities available-for-sale; bond investment; effective interest (LO12-1, 12-4) Fuzzy Monkey Technologies, Inc., purchased as a long-term investment $120
Help with 4A&4B please
Problem 12-3 (Algo) Securities available-for-sale; bond investment; effective interest (LO12-1, 12-4) Fuzzy Monkey Technologies, Inc., purchased as a long-term investment $120 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 $100 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 $110 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, 2021, balance sheet? 4-6. Prepare the entry necessary to achieve this reporting objective. 5. How would Fuzzy Monkey's 2021 statement of cash flows be affected by this investment? (If more than one approach is possible, indicate the one that is most likely.) Complete this question by entering your answers in the tabs below. Req 1 to 3 Req 4A Req 4B Reg 5 At what amount will Fuzzy Monkey report its investment in the December 31, 2021, balance sheet? (Do not round intermediate calculations. Enter your answer in millions (i.e., 10,000,000 should be entered as 10).) Investment millionStep by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started