User Account

All Pages

Prepare the relevant journal entries on the respective dates

Assignment Help Accounting Basics
Reference no: EM132782832

Fuzzy Monkey Technologies, Inc., purchased as a long-term investment $190 million of 8% bonds, dated January 1, on January 1, 2018. Management intends to have the investment available for sale when circumstances warrant. When the company purchased the bonds, management elected to account for them under the fair value option. For bonds of similar risk and maturity the market yield was 10%. The price paid for the bonds was $169 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 $180 million.

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

Problem 2: At what amount will Fuzzy Monkey report its investment in the December 31, 2018, balance sheet?

Problem 3: Prepare the journal entry necessary to achieve this reporting objective.

Problem 4: How would Fuzzy Monkey's 2018 statement of cash flows be affected by this investment assuming Fuzzy anticipates holding these investments for a sufficiently long period?

Reference no: EM132782832

Questions Cloud

Prepare general journal entries necessary to open the record : Prepare general journal entries necessary to open the records of the partnership. Richard, barry and Andrew decided to enter into a partnership agreement
What account for issue and exercise of options in campbell : What Account for the issue and exercise of options in Campbell Ltd? On 1 July 2019 Campbell Ltd provided 1 million options to its chief executive officer.
What are share splits : What are share splits and what accounting entries are necessary when a share split is undertaken? Are preference shares debt or equity? Provide reasoning
Explain how you will protect the rights of clients : Explain how you will protect the rights of clients when using the social media or online communication tool you identified and how you will avoid entering
Prepare the relevant journal entries on the respective dates : How would Fuzzy Monkey's 2018 statement of cash flows be affected by this investment assuming Fuzzy anticipates holding these investments
Prepare journal entries to record purchases and sales : Prepare journal entries to record purchases and sales for Snow-Tech in a periodic inventory system using average cost
What is the cash payback period for each site : What is the cash payback period for each site (rounded to two decimal places)? What is the net present value (NPV) of each site
What inventory account at december should be reduced by : What inventory account at December 31, 2020 should be reduced by? Merchandise sent to customer for approval (cost of goods, P90,000) 120,000
Should write the check today : On the last day of the fiscal year, How would the company be affected if the check is written and the invoice ends up being erroneous?

Reviews

Write a Review

Accounting Basics Questions & Answers

  How much control does fed have over this longer real rate

Hubbard argues that the Fed can control the Fed funds rate, but the interest rate that is important for the economy is a longer-term real rate of interest.   How much control does the Fed have over this longer real rate?

  Coures:- fundamental accounting principles

Coures:- Fundamental Accounting Principles: - Explain the goals and uses of special journals.

  Accounting problems

Accounting problems,  Draw a detailed timeline incorporating the dividends, calculate    the exact Payback Period  b)   the discounted Payback Period. the IRR,  the NPV, the Profitability Index.

  Theory of interest - term structure of interest rates

Term Structure of Interest Rates

  Write a report on internal controls

Write a report on Internal Controls

  Prepare the bank reconciliation for company

Prepare the bank reconciliation for company.

  Cost-benefit analysis

Create a cost-benefit analysis to evaluate the project

  Theory of interest

Theory of Interest: NPV, IRR, Nominal and Real, Amortization, Sinking Fund, TWRR, DWRR

  Liquidity and profitability

Distinguish between liquidity and profitability.

  What is the expected risk premium on the portfolio

Your Corp, Inc. has a corporate tax rate of 35%. Please calculate their after tax cost of debt expressed as a percentage. Your Corp, Inc. has several outstanding bond issues all of which require semiannual interest payments.

  Simple interest and compound interest

Simple Interest, Compound interest, discount rate, force of interest, AV, PV

  Capm and venture capital

CAPM and Venture Capital

Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

Submit Assignment

Academics

Major Subjects

Majors

Get In Touch

whatsapp: +91-977-207-8620

Phone: +91-977-207-8620

Email: [email protected]

TERMS & POLICIES

HELP & SUPPORT

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd