Question
What is the steps to get answer in journal 3, for question 4. Fuzzy Monkey Technologies, Inc., purchased as a long term investment $210 million
What is the steps to get answer in journal 3,
for question 4.
Fuzzy Monkey Technologies, Inc., purchased as a long term investment $210 million of 6% bonds, dated Jan 1. Management has the positive intent and ability to hold the bonds until maturity. For bonds of similar risk and maturity the market yield was 8% The price paid for the bonds $192 million. Interest is received semiannually on June 30 and Dec 31. Due to changing market conditions the fair value of the bonds at Dec 31 was $200 million.
1-3 Prepare the relevant journal entries on the respective dates (record the interest at effective rate)?
Step and formula for 3 no answers.
(I got 1 and 2 journal entries but cannot get 3. I tried (.04x(192+.08)) and the .1
4 At what amount will Fuzzy Monkey report its investment in Dec 31 balance sheet?
Just step not answer
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