Answer and Explanation:
1 to 3.
Journal Entries - Fuzzy Monkey Technologies Inc.
Debit (In Million) Credit (In Million)
1. 1-Jan-21
Dr Investment in Bond Dr $220.00
Cr To Cash $201.00
CrTo Discount on bond investment $19.00
2.
30-Jun-21
Dr Cash ($220 *8% * 6/12) $8.80
Dr Discount on bond investment Dr $1.25
Cr To Interest revenue ($201*10%*6/12) $10.05
3.
31-Dec-21
Dr Cash ($220 *8% * 6/12) $8.80
Dr Discount on bond investment Dr $1.31
Cr To Interest revenue ($202.25*10%*6/12) $10.11
4a.
Fuzzy monkey report its investment on Dec 31, 2021 balance sheet at fair value which is $210 million
4b.
Journal Entries - Fuzzy Monkey Technologies Inc.
Debit (In Million) Credit (In Million)
1. 31-Dec-21
Dr Fair value adjustment ($210 - $201 - $1.25 - $1.31) $6.44
Cr To Unrealized holding gain or loss - OCI $6.44
5.
Statement of cash flows (Partial)
For 2021
Particulars Amount (In million)
Cash flow from operating activities:
Interest received $17.60 Inflow
Cash flow from investing activities:
Cash paid for purchase of investment $201.00
Outflow
