Problem 12-2 (Algo)

Problem 12-2 (Algo) Trading securities; bond investment; effective interest [LO12-1, 12-3] Fuzzy Monkey Technologies, Inc, purchased as a short-term investment $240 million of 6% bonds, dated January 1, on January 1 , 2021. Management intends to include the investment in a short term, active trading portfolio. For bonds of similar risk and maturity the market yield was 8%. The price paid for the bonds was $219 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 $230 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-b. Prepare any 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. Prepare the relevant journal entries on the respectlve dates (record the interest at the effective rate). (If no entry is required for a trancaction/event, select "No jourmal entry required in the first account field. Do not round intermediate calculations, Enter your answers in milions rounded to 2 decimal places, (t.e, 5,500,000 should be entered as 5.50),A Journal entry worksheet Record Fuzzy Monkey's investment on bonds on January 1, 2021. Note: Enter debits before credits. Journal entry worksheet Record the interest revenue on June 30,2021. Note: Enter debits before credits. Journal entry worksheet Record the interest revenue on December 31, 2021. Note: Enter debits before credits. 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-b. Prepare any 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 approa indicate the one that is most likely.) Complete this question by entering your answers in the tabs below. 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).) Journal entry worksheet Record any necessary entry to report the investment at the correct value on the balance sheet. Note: Enter debits before credits. 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-b. Prepare any 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 indicate the one that is most likely.) Complete this question by entering your answers in the tabs below. 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.) (Do not round intermediate calculations. Enter all amounts as positive values. Enter your answers in millions rounded to 1 decimal place, (i.e., 5,500,000 should be entered as 5.5 ).)