Solution 1-3:
Journal Entries - Fuzzy Monkey Technologies Inc. | ||||
Event | Date | Particulars | Debit (In Million) | Credit (In Million) |
1 | 1-Jan-21 | Investment in Bond Dr | $80.00 | |
To Cash | $64.00 | |||
To Discount on bond investment | $16.00 | |||
(Being investment in bond recorded) | ||||
2 | 30-Jun-21 | Cash Dr ($80 *6% * 6/12) | $2.40 | |
Discount on bond investment Dr | $0.16 | |||
To Interest revenue ($64*8%*6/12) | $2.56 | |||
(Being revenue recognition for bond interest and discount amortized) | ||||
3 | 31-Dec-21 | Cash Dr ($80 *6% * 6/12) | $2.40 | |
Discount on bond investment Dr | $0.17 | |||
To Interest revenue ($64.16*8%*6/12) | $2.57 | |||
(Being revenue recognition for bond interest and discount amortized) |
Solution 4a:
Fuzzy monkey should report its investment on Dec 31, 2021 balance sheet at fair value i.e. $70 million
Solution 4b:
Journal Entries - Fuzzy Monkey Technologies Inc. | ||||
Event | Date | Particulars | Debit (In Million) | Credit (In Million) |
1 | 31-Dec-21 | Fair value adjustment Dr ($70 - $64 - $0.16 - $0.17) | $5.67 | |
To Unrealized holding gain or loss - OCI | $5.67 | |||
(Being adjusting entry to record investment at fair value) |
Solution 5:
Statement of cash flows (Partial) For 2021 |
||
Particulars | Amount (In million) | |
Cash flow from operating activities: | ||
Interest received | $4.80 | Inflow |
Cash flow from investing activities: | ||
Cash paid for purchase of investment | -$64.00 | Outflow |
Fuzzy Monkey Technologies, Inc., purchased as a long-term investment $80 million of 6% bonds, dated January...
Fuzzy Monkey Technologies, Inc., purchased as a long-term investment $160 million of 8% bonds, dated January 1, on January 1, 2021. Management has the positive intent and ability to hold the bonds until maturity. For bonds of similar risk and maturity the market yield was 10%. The price paid for the bonds was $142 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,...
Fuzzy Monkey Technologies, Inc., purchased as a long-term investment $150 million of 6% bonds, dated January 1, on January 1, 2021. 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 was $133 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,...
Fuzzy Monkey Technologies, Inc., purchased as a short-term investment $230 million of 10% bonds, dated January 1, on January 1, 2021. Management intends to include the investment in a short-term, active trading portfolio. For bonds of similar risk and maturity the market yield was 12%. The price paid for the bonds was $210 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...
Fuzzy Monkey Technologies, Inc., purchased as a long-term investment S90 million of 6% bonds, dated January t on January 1, 2018. Management has the positive intent and ability to hold the bonds until maturity. For bonds of similar risk and maturity the market yileld was 8%. The price paid for the bonds was $73 million. Interest is received semiannually on June 30 and December St Oue to changing market conditions, the fair value of the bonds at December 31, 2018,...
Fuzzy Monkey Technologies, Inc., purchased as a long-term investment $180 million of 6% bonds, dated January 1, on January 1, 2021. 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 was $160 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,...
Fuzzy Monkey Technologies, Inc, purchased as a long-term investment $120 million of 6% bonds, dated January 1, 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 8%. The price paid for the bonds was $100 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...
Fuzzy Monkey Technologies, Inc., purchased as a short-term investment $170 million of 10% bonds, dated January 1, on January 1, 2021. Management intends to include the investment in a short-term, active trading portfolio. For bonds of similar risk and maturity the market yield was 12%. The price paid for the bonds was $151 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...
Fuzzy Monkey Technologies, Inc., purchased as a long-term investment $220 million of 8% bonds, dated January 1, 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 10%. The price paid for the bonds was $201 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...
Fuzzy Monkey Technologies, Inc., purchased as a long-term investment $80 million of 8% bonds, dated January 1, on January 1, 2018. Management intends to have the investment available for sale when circumstances warrant. For bonds of similar risk and maturity the market yield was 10%. The price paid for the bonds was $66 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...
Fuzzy Monkey Technologies, Inc., purchased as a long-term investment $80 million of 8% bonds, dated January 1, on January 1, 2018. Management intends to have the investment available for sale when circumstances warrant. For bonds of similar risk and maturity the market yield was 10%. The price paid for the bonds was $66 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...