Answer and Explanation:
Journal Entries - Fuzzy Monkey Technologiesn Inc
Debit (In Million) Credit (In Million)
1. 1-Jan-21
Dr Investment in Bond $220.00
Cr To Cash $201.00
Cr To Discount on bond investment $19.00
(Being investment in bond recorded)
2. 30-Jun-21
Dr Cash ($220 *8% * 6/12) $8.80
Dr Discount on bond investment
$1.25
Cr To Interest revenue
($201*10%*6/12) $10.05
(Being revenue recoginition for bond interest and discount amortized)
3. 31-Dec-21
Dr Cash ($220 *8% * 6/12) $8.80
Dr Discount on bond investment $1.31
Cr To Interest revenue
($202.25*10%*6/12) $10.11
(Being revenue recoginition for bond interest and discount amortized)
4a:
Fuzzy monkey report its investment on December 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
(Being adjusting entry to record investment at fair value)
5:
Statement of cash flows (Partial)
For 2021
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
