Problem #3 Fuzzy Monkey Technologies, Inc., purchased as a long-term investment $275 million of 9% bonds, dated January 1, on January 1, 2018. Management has the positive intent and ability to hold the bonds until maturity. For bonds of similar risk and maturity the market yield was 6%. The terms of the bonds is 10 years. 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 $300 million. Required:

1. Calculate the purchase price of the bonds.

2. Using the purchase price of the bond calculated in #1, prepare an amortization schedule for this bond.

3. Prepare the journal entries for:

a. January 1,2018

b. June 30, 2018

c. December 30, 2018