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Fuzzy Monkey Technologies, Incorporated purchased as a long-term Investment $220 million of 8% bonds, dated January 1, on January 1, 2024. 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, 2024, 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, 2024 balance sheet? 5. How would Fuzzy Monkey's 2024 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 4 Prepare the relevant journal entries on the respective dates (record the interest at the effective rate). Note: 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 Journal entry worksheet < 2 1 3 Record Fuzzy Monkey's investment on bonds on January 1, 2024. Note: Enter debits before credits. Date January 01, 2024 Req 5 Record entry General Journal Clear entry Debit Credit View general journal >

Fuzzy Monkey Technologies, Incorporated purchased as a long-term Investment $220 million of 8% bonds, dated January 1, on January 1, 2024. 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, 2024, 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, 2024 balance sheet? 5. How would Fuzzy Monkey's 2024 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 4 Prepare the relevant journal entries on the respective dates (record the interest at the effective rate). Note: 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 Journal entry worksheet < 2 1 3 Record Fuzzy Monkey's investment on bonds on January 1, 2024. Note: Enter debits before credits. Date January 01, 2024 Req 5 Record entry General Journal Clear entry Debit Credit View general journal >

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Fuzzy Monkey Technologies, Incorporated purchased as a long-term Investment $220 million of 8% bonds, dated January 1, on January 1, 2024. 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, 2024, 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, 2024 balance sheet? 5. How would Fuzzy Monkey's 2024 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 4 Prepare the relevant journal entries on the respective dates (record the interest at the effective rate). Note: 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 Journal entry worksheet < 2 1 3 Record Fuzzy Monkey's investment on bonds on January 1, 2024. Note: Enter debits before credits. Date January 01, 2024 Req 5 Record entry General Journal Clear entry Debit Credit View general journal >
Transcribed Image Text:Fuzzy Monkey Technologies, Incorporated purchased as a long-term Investment $220 million of 8% bonds, dated January 1, on January 1, 2024. 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, 2024, 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, 2024 balance sheet? 5. How would Fuzzy Monkey's 2024 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 4 Prepare the relevant journal entries on the respective dates (record the interest at the effective rate). Note: 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 Journal entry worksheet < 2 1 3 Record Fuzzy Monkey's investment on bonds on January 1, 2024. Note: Enter debits before credits. Date January 01, 2024 Req 5 Record entry General Journal Clear entry Debit Credit View general journal >
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