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Record fuzzy monkeys investment on bonds on january

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Reference no: EM132472651

Fuzzy Monkey Technologies, Inc., purchased as a long-term investment 5140 million of 10% bonds, dated January I, on January 1, 2021. Management intends to have the investment available for sale when circumstances warrant. For bonds of similar risk and maturity the market yield was 12%. The price paid for the bonds was SI24 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, 2021, was SI30 million.

Required:

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

Question 2: Record Fuzzy Monkey's investment on bonds on January 1, 2021.

Question 3: Record the interest revenue on June 30, 2021.

Question 4: Record the interest revenue on December 31, 7021.

Question 5: At what amount will Fuzzy Monkey report its investment in the December 31, 2021, balance sheet? (Do not round intermediate calculations. Enter your answer In millions (I.e., 10,000,000 should be entered as 10).)

Question 6: Prepare the entry necessary to achieve this reporting objective for December 31, 2021

Question 7: How would Fuzzy Monkeys 2021 statement of cash flows be affected by this investment? (If more than one approach is possible. indicate the one that is most likely.)

Reference no: EM132472651

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