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Fuzzy Monkey Technologies, Inc., purchased as a long-term investment $160 million of 8% bonds, dated January 1 , on January 1,2016 . Management has the
Fuzzy Monkey Technologies, Inc., purchased as a long-term investment $160 million of 8% bonds, dated January 1 , on January 1,2016 . 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 $142 million. Interest is received semiannually on June 30 and December 31 . Due to changing market conditions, the fair value of the bonds at December 31,2016 , was $150 million. Required: 1. to 3. 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. Do not round intermediate calculations. Enter your answers in millions rounded to 2 decimal places, (i.e., 5,500,000 should be entered as 5.50 ).)
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