Fuzzy Monkey Technologies, Incorporated purchased as a short-term investment $170 million of 10% bonds, dated...
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Accounting
Fuzzy Monkey Technologies, Incorporated purchased as a shortterm investment $ million of bonds, dated January on January Management intends to include the investment in a shortterm, active trading portfolio. For bonds of similar risk and maturity the market yield was The price paid for the bonds was $ million. Interest is received semiannually on June and December Due to changing market conditions, the fair value of the bonds at December was $ million.
Required:
to Prepare the relevant journal entries on the respective dates record the interest at the effective rate
a At what amount will Fuzzy Monkey report its investment in the December balance sheet?
b Prepare any entry necessary to achieve this reporting objective.
How would Fuzzy Monkey's statement of cash flows be affected by this investment? If more than one approach is possible, indicate the one that is most likely.
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