Fuzzy Monkey Technologies, Inc., purchased as a long-term investment $80 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 $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 $70 million Required: 1. to 3. Prepare the relevant journal entries on the respective dates (record the interest at the effective rate). 4. At what amount will Fuzzy Monkey report its investment in the December 31, 2021 balance sheet? 5. How would Fuzzy Monkey's 2021 statement of cash flows be affected by this investment? (if more than one approach is possible, indicate the one that is most likely.) Answer is complete but not entirely correct. Complete this question by entering your answers in the tabs below. Reg 1 to 3 Reg 4 Reg 5 Prepare the relevant journal entries on the respective dates (record the interest at the effective rate). (If no entry is required for a transaction/event, select "No journal entry required" in the first account field. Enter your answers in millions rounded to 2 decimal places, (1.e., 5,500,000 should be entered as 5.50).) Complete this question by entering your answers in the tabs below. Req i to 3 Reg 4 Reg 5 Prepare the relevant journal entries on the respective dates (record the interest at the effective rate). (If no entry is required for a transaction/event, select "No journal entry required in the first account field, Enter your answers in millions rounded to 2 decimal places, (i.e., 5,500,000 should be entered as 5.50).) No Date General Journal Debit Credit January 01, 2021 Investment in bonds 80,000.00 Cash 66,000.00 % Discount on bond investment 14,000.00 1 OO 2 June 30, 2021 Cash Discount on bond investment Interest revenue 3,200.00 1,000.00 3,300.00 3 December 31, 202 Cash 3,200.00 Discount on bond investment Interest revenue 105,000.00 3,305,000.00 Req 1 to 3 Req 4 Reg 5 At what amount will Fuzzy Monkey report its investment in the December 31, 2021 balance sheet? intermediate calculations. Enter your answer in millions rounded to 2 decimal places (1.e., 5,500,000 5.50).) Investment $ 66,205.00 million Req 1 to 3 Req 4 Req 5 How would Fuzzy Monkey's 2021 statement of cash flows be akfected by this investment? (If ma possible, indicate the one that is most likely.) (Do not round intermediate calculations. Enter all Enter your answers in millions rounded to 1 decimal place, (i.e., 5,500,000 should be entered as Operating cash flow 6,605,000.0 million inflow Investing cash flow 6,605,000.0 million outflow
