Fuzzy Monkey Technologies, Inc., purchased as a long-term investment $90 million of 6% bonds, dated January 1, on January 1, 2021. Management intends to have the investment available for sale when circumstances warrant. When the company purchased the bonds, management elected to account for them under the fair value option. For bonds of similar risk and maturity the market yield was 8%. The price paid for the bonds was $73 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 $80 million. Required: 1. to 3. Prepare the relevant journal entries on the respective dates (record the interest at the effective rate). 4-a. At what amount will Fuzzy Monkey report its investment in the December 31, 2021, balance sheet? 4-b. Prepare the journal entry necessary to achieve this reporting objective. 5. How would Fuzzy Monkeys 2021 statement of cash flows be affected by this investment assuming Fuzzy anticipates holding these investments for a sufficiently long period? (If more than one approach is possible, indicate the one that is most likely.)

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Complete this question by entering your answers in the tabs below.

• Req 1 to 3
• Req 4A
• Req 4B
• Req 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. 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).)

No	Date	General Journal	Debit	Credit
1	January 01, 2021	Investment in bondsselected answer correct	90,000,000.00selected answer incorrect	not attempted
		Discount on bond investmentselected answer correct	not attempted	17,000,000.00selected answer incorrect
		Cashselected answer correct	not attempted	73,000,000.00selected answer incorrect
2	June 30, 2021	Cashselected answer correct	2,700,000.00selected answer incorrect	not attempted
		Discount on bond investmentselected answer correct	220,000.00selected answer incorrect	not attempted
		Interest revenueselected answer correct	not attempted	2,920,000.00selected answer incorrect
3	December 31, 2021	Cashselected answer correct	2,700,000.00selected answer incorrect	not attempted
		Discount on bond investmentselected answer correct	228,800.00selected answer incorrect	not attempted
		Interest revenueselected answer correct	not attempted	2,928,800.00selected answer incorrect

• Req 1 to 3
• Req 4A