Fuzzy Monkey Technologies, Inc., purchased as a short-term investment $80 million of 6% bonds, dated January 1, on January 1, 2018. Management intends to include the investment in a short-term, active trading portfolio. For bonds of similar risk and maturity the market yield was 8%. The price paid for the bonds was $64 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, 2018, was $70 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, 2018, balance sheet?

4-b.Prepare any entry necessary to achieve this reporting objective.

5.How would Fuzzy Monkey's 2018 statement of cash flows be affected by this investment?

• Record any necessary entry to report the investment at the correct value on the balance sheet.

Note: Enter debits before credits.

How would Fuzzy Monkey's 2018 statement of cash flows be affected by this investment?(Do not round intermediate calculations. Enter your answers in millions rounded to 1 decimal place, (i.e., 5,500,000 should be entered as 5.5).)

Operating cash flowmillionoutflowInvesting cash flowmillionno effect

DateGeneral JournalDebitCreditDecember 31, 2018