Fuzzy Monkey Tech, Inc., purchased $80 million of 8% bonds, dated Jan. 1, on Jan. 1, 2016. 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 Dec. 31. Due to changing market conditions, the fair value of the bonds at Dec. 31, 2016, was $70 million.

1) Prepare the journal entry to record the investment on Jan. 1, 2016.

2) Prepare the journal entries to record interest on 6/30 &12/31, 2016.

3a) At what amount will Fuzzy Monkey report its investment on the 12/31/2016 balance sheet if management has the positive intent and ability to hold the bonds until maturity?

3b) At what amount will Fuzzy Monkey report its investment on the 12/31/2016 balance sheet if management intends to sell it quickly? Prepare any entry necessary.

3c) At what amount will Fuzzy Monkey report its investment on the 12/31/2016 balance sheet if management intends to have the investment available for sale when circumstances warrant? Prepare any entry necessary.