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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, 2024 balance sheet? 4-b. Prepare any entry necessary to achieve this reporting objective. 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.)

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, 2024 balance sheet? 4-b. Prepare any entry necessary to achieve this reporting objective. 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.)

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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Ee 73.

1 Record Fuzzy Monkey's investment on bonds on January 1, 2024. Date January 01, 2024 Note: Enter debits before credits. < Record entry 1 2 Journal entry worksheet 2 Date June 30, 2024 3 Note: Enter debits before credits. Record entry Record the interest revenue on June 30, 2024. General Journal Date December 31, 2024 Clear entry General Journal Note: Enter debits before credits. Journal entry worksheet < 1 2 3 Clear entry Record the interest revenue on December 31, 2024. General Journal Debit Debit Credit Debit View general journal View general journal Credit Credit > >
Transcribed Image Text:1 Record Fuzzy Monkey's investment on bonds on January 1, 2024. Date January 01, 2024 Note: Enter debits before credits. < Record entry 1 2 Journal entry worksheet 2 Date June 30, 2024 3 Note: Enter debits before credits. Record entry Record the interest revenue on June 30, 2024. General Journal Date December 31, 2024 Clear entry General Journal Note: Enter debits before credits. Journal entry worksheet < 1 2 3 Clear entry Record the interest revenue on December 31, 2024. General Journal Debit Debit Credit Debit View general journal View general journal Credit Credit > >
Fuzzy Monkey Technologies, Incorporated purchased as a short-term investment $100 million of 8% bonds, dated January 1, on January 1, 2024. Management intends to include the investment in a short-term, active trading portfolio. For bonds of similar risk and maturity the market yield was 10%. The price paid for the bonds was $82 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 $90 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, 2024 balance sheet? 4-b. Prepare any entry necessary to achieve this reporting objective. 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 5 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). Req 1 to 3 Req 4A Req 48
Transcribed Image Text:Fuzzy Monkey Technologies, Incorporated purchased as a short-term investment $100 million of 8% bonds, dated January 1, on January 1, 2024. Management intends to include the investment in a short-term, active trading portfolio. For bonds of similar risk and maturity the market yield was 10%. The price paid for the bonds was $82 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 $90 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, 2024 balance sheet? 4-b. Prepare any entry necessary to achieve this reporting objective. 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 5 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). Req 1 to 3 Req 4A Req 48
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