Problem 12-1 Securities held-to-maturity; bond investment; effective interest [L012-1, 12-2] Fuzzy Monkey Technologies, Inc., purchased as a long-term investment $160 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 yield was 10%. The price paid for the bonds was $142 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 $150 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. Req 1 to 3Req 4 Req 5 Prepare the relevant journal entries on the respective dates (record the interest arthe 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, (i.e., 5,500,000 should be entered as 5.50).) View transaction list Prev 7 of 15EENext > 5 6 7 8 9 Req 1 to 3 Req 4 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. Ente answers in millions rounded to 2 decimal places, (i.e., 5,500,000 should be entered as 5.50).) View transaction list Journal entry worksheet 3 Record the interest revenue on June 30, 2018 Note: Enter debits before credits. Date Debit Credit June 30, 2018 Req 1 to 3 Req 4 Req 5 Prepare the relevant journal entries on the respective dates (record the interest at the effective rate). (If no entry is required i transaction/event, select "No journal entry required" in the first account field. Do not round intermediate calculations. Enter yo answers in millions rounded to 2 decimal places, (i.e., 5,500,000 should be entered as 5.50).) View transaction list Journal entry worksheet 3 es Record the interest revenue on December 31, 2018. Note: Enter debits before credits. Date General Journal Debit Credit December 31, 2018 K Prev 7 of 15 Next> Required: 1. to 3. Prepare the relevant journ 4. At what amount will Fuzzy Monkey report its investment in the December 31, 2018, balance shet? 5. How would Fuzzy Monkey's 2018 statement of cash flows be affected by this investment? al entries on the respective dates (record the interest at the effective rate). Complete this question by entering your answers in the tabs below. Req 1 to 3 Req 4 Req 5 At what amount will Fuzzy Monkey report its investment in the December 31, 2018, balance sheet? (Do not round intermediate calculations. Enter your answer in millions rounded to 2 decimal places, (i.e., 5,500,000 should be entered as 5.50).) million Req 1 to 3 Req 5 > 7 of 15 Next> 8 7 8 9 6
