Fuzzy Monkey Technologies, Incorporated purchased as a long$-$term investment $\backslash$$$170$ million of $10\backslash \%$ bonds, dated January $1,$ on January $1,2024.$ Management has the positive intent and ability to hold the bonds until maturity. For bonds of similar risk and maturity the market yield was $\backslash (12\backslash \%\backslash ).$ The price paid for the bonds was $\backslash (\backslash$$ $151\backslash )$ million. Interest is received semiannually on June $30$ and December $31.$ Due to changing market conditions, the fair value of the bonds at December $31,2024,$ was $\backslash (\backslash$$ $160\backslash )$ 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 $31,2024$ balance sheet?

$5.$ How would Fuzzy Monkey's $2024$ statement of cash flows be affected by this investment? $($If more than one approach is possible, indicate the one that is most likely.$)$

Complete this question by entering your answers in the tabs below.

Prepare the relevant journal entries on the respective dates $($record the interest at the effective rate$).$

Note: 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 $5\mathrm{.}50).$

Journal entry worksheet

$1$

$2$

$3$

Record Fuzzy Monkey's investment on bonds on January $1,2024.$

Note: Enter debits before credits.