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Prepare the relevant journal entries on the respective dates

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Point 1: 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.

Question 1: Prepare the relevant journal entries on the respective dates (record the interest at effective rate)?

Question 2: At what amount will Fuzzy Monkey report its investment in Dec 31 balance sheet?

Reference no: EM132480962

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