Problem 12-4 Fair value option; bond investment; effective interest (LO12-1, 12-2, 12-3, 12-4, 12-8] Fuzzy Monkey Technologies, Inc., purchased as a long-term investment $80 million of 8% bonds, dated January 1, on January 1, 2018 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 10%. The price paid for the bonds was $66 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 the journal entry necessary to achieve this reporting objective. 5. How would Fuzzy Monkey's 2018 statement of cash flows be affected by this investment assuming Fuzzy anticipates holding these investments for a sufficiently long period? Complete this question by entering your answers in the tabs below. Reg 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 founded to 2 decimal places, i.e., 5,500,000 should be entered as 5.50) View transaction list Journal entry worksheet 2 3 Record Fuzzy Monkey's investment on bonds on January 1, 2018 Note: Enter debits before credits. General Journal Debit Credit Date January 01, 2018 View general journal Clear entry Record entry Reg 4A >