Prepare the relevant journal entries on the respective dates

Assignment Help Accounting Basics

Reference no: EM132731863

Question - Fuzzy Monkey Technologies, Inc., purchased as a short-term investment $80 million of 6% bonds, dated January 1, on January 1, 2018. 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 $64 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, 2018, was $70 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, 2018, balance sheet?

4-b. Prepare any entry necessary to achieve this reporting objective.

5. How would Fuzzy Monkey's 2018 statement of cash flows be affected by this investment?

Record any necessary entry to report the investment at the correct value on the balance sheet.

How would Fuzzy Monkey's 2018 statement of cash flows be affected by this investment?

Reference no: EM132731863

Questions Cloud

Effect of excess caffeine ingestion on osmotic pressure : a) Draw two separate flow charts showing how hormones help maintain homeostasis of

Describe how a co-ip experiment can be used : Describe how a co-IP experiment can be used to provide evidence for this interaction. Assume that antibodies specific to X and Y are available for use.

How is covid-19 related to climate change : How is covid-19 related to climate change? How climate change increase the rate of spreading the virus?

Underlying cause of the lack of molecules : What molecules (or lack thereof) did Dr. Goldberger and the work of others identify as the cause of Pellagra?

Prepare the relevant journal entries on the respective dates : Fuzzy Monkey Technologies, Inc., purchased as a short-term investment $80 million of 6% bonds, Prepare the relevant journal entries on the respective dates

Explain how an increase in blood pressure : Please explain how an increase in blood pressure can involve the kidneys and adrenal glands.

Phases of the female cycle : Please describe the hormones that are released during the female menstrual cycle. Please include Days 1-5 (Menses)

How is this change reported in the financial statements : How is this change reported in the financial statements and what other accounts are affected? Provide an example from a publicly-traded company

Explain major ethical theories : Choose one topic regarding taking a life (death penalty, abortion, just war theory, euthanasia ..etc.). Defend a situation in which it is okay to take a life

User Account

All Pages