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 | $230.00 | |
To Cash | $210.00 | |||
To Discount on bond investment | $20.00 | |||
(Being investment in bond recorded) | ||||
2 | 30-Jun-21 | Cash Dr ($230 * 10% * 6/12) | $11.50 | |
Discount on bond investment Dr | $1.10 | |||
To Interest revenue ($210*12%*6/12) | $12.60 | |||
(Being revenue recognition for bond interest and discount amortized) | ||||
3 | 31-Dec-21 | Cash Dr ($230 * 10% * 6/12) | $11.50 | |
Discount on bond investment Dr | $1.17 | |||
To Interest revenue ($211.10*12%*6/12) | $12.67 | |||
(Being revenue recognition for bond interest and discount amortized) |
Solution 4a:
Fuzzy monkey report its investment on 31.12.2021 balance sheet at fair value i.e. $220 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 ($220 - $210 - $1.10 - $1.17) | $7.73 | |
To Unrealized holding gain or loss - NI | $7.73 | |||
(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: | ||
Short term investment | $210.00 | |
Less: Interest received | $23.00 | |
Net cash flow from operating activities | $187.00 | Outflow |
Cash flow from investing activities: | $0.00 |
Fuzzy Monkey Technologies, Inc., purchased as a short-term investment $230 million of 10% bonds, dated January...
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 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 short-term investment $110 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 $94 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 $120 million of 6% 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 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 $240 million of 6% 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 8%. The price paid for the bonds was $219 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 $80 million of 8% 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 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, 2021, was...
Fuzzy Monkey Technologies, Inc., purchased as a short-term investment $90 million of 6% 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 8%. The price paid for the bonds was $73 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 $120 million of 6% 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 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 $250 million of 8% 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 10%. The price paid for the bonds was $228 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 $60 million of 6% 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 8%. The price paid for the bonds was $46 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...