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Please verify below responses and explain with details. Fuzzy Monkey Technologies, Inc., purchased as a long-term Investment $220 million of 8% bonds, dated January 1,
Please verify below responses and explain with details.
Fuzzy Monkey Technologies, Inc., purchased as a long-term Investment $220 million of 8% bonds, dated January 1, on January 1, 2018. Management has the positive Intent and ability to hold the bonds until maturity. For bonds of similar risk and maturity the market yleld was 10%. The price paid for the bonds was $201 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 $210 million. Required: 1. to 3. Prepare the relevant journal entries on the respective dates (record the Interest at the effective rate). 4. At what amount will Fuzzy Monkey report Its Investment in the December 31, 2018, balance sheet? 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. Reg 1 to 3 Reg 4 Reg 5 How would Fuzzy Monkey's 2018 statement of cash flows be affected by this investment? (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).) inflow Operating cash flow Investing cash flow $ $ 17.6 million 201.0 millionStep by Step Solution
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