(Algo) Securities held-to-maturity; bond investment; effective interest [LO12-1, 12-2] Fuzzy Monkey Technologies, Inc., purchased as a long-term investment $100 million of 8% bonds, dated January 1, on January 1, 2021. Management has the positive intent and ability to hold the bonds until maturity. For bonds of similar risk and maturity the market yield was 10%. The price paid for the bonds was $82 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 $90 million.
Required:
1. to 3. Prepare the relevant journal entries on the respective dates (record the interest at the effective rate).
4. At what amount will Fuzzy Monkey report its investment in the December 31, 2021 balance sheet?
5. How would Fuzzy Monkey's 2021 statement of cpsh flows be affected by this investment? If more than one approach is possible, indicate the one that is most likely.)
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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).)
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Journal entry worksheet
1 2 3
Record the Interest revenue on June 30, 2021.

4) Since these bonds are considered held to maturity securities, they are reported at carrying value in the balance sheet, the market value does not affect the investment account.

These bonds will be reported as non-current assets as:

Investment in bonds for $82.205 million

5) Interest revenue ($8.205 million) is included in the income statement, and therefore, it will increase the company's net income and operating cash flows. The $82 million paid for the bonds will decrease the cash flows from investing activities.