Problem 12-3 (Algo) Securities available-for-sale; bond investment; effective interest (LO12-1, 12-4] Fuzzy Monkey Technologies, Inc., purchased as a long-term investment $130 million of 8% bonds, dated January 1, on January 1, 2021. Management intends to have the investment available for sale when circumstances warrant. For bonds of similar risk and maturity the market yield was 10%. The price paid for the bonds was $115 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 $120 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 entry necessary to achieve this reporting objective. 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.) Req 1 to 3 Reg 4A Reg 4B 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. 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).) (X View transaction list View journal entry worksheet Debit Credit No 1 130.00 Date General Journal January 01, 2021 Investment in bonds Cash Discount on bond investment 115.00 15.00 2 June 30, 2021 Cash Discount on bond investment Interest revenue 5.20 0.55 5.75 3 December 31, 2021 Cash 5.20 Discount on bond investment Interest revenue View transaction list View journal entry worksheet No Debit Credit 1 Date General Journal December 31, Fair value adjustment 2021 Gain on investments (unrealized, NI) 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.) (Do not round intermediate calculations. Enter all amounts as positive values. Enter your answers in millions rounded to 1 decimal place, i.e., 5,500,000 should be entered as 5.5).) Operating cash flow Investing cash flow million million