also, it includes other questions like : PART B : Prepare journal entries to record the investment activity including the appropriate fair value adjustment on December 31. 1. Record the purchase of investment.
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2 Record the purchase of investment.
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3 Record the purchase of a 4-year, 7.20%, $92,000 bond.
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4 Record the purchase of equity investment.
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5 Record the collection of dividend income.
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6 Record the sale of investment.
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7 Record the interest collected on bond.
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8 Record the collection of dividend income.
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9 Record the collection of dividend income.
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10 Record the interest collected on bond.
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11 Record the interest collected on bond.
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12 Record the fair value adjustment. PART C :Show how the investments will be reported on the December 31, 2020, balance sheet (includes the Current Investments and Non- Current Investments) PART D :Analysis Component: If the fair value adjustment is not recorded by Safety Development Corporation, what is the impact on the financial statements?
Safety Development Corporation had relatively large idle cash balances and invested them as follows in securities to be held as non- strategic investments: 2020 Feb. 7 Purchased 2,400 common shares of Royal Bank at $26.70, plus $500 in transaction fees. 19 Purchased 1,400 common shares of Imperial Oil at $52.25, and paid $250 in transaction fees. Apr. 1 Paid $90,241 plus $500 in transaction fees for a 7.20%, four-year, $92,000 Minco Inc. bond that pays interest quarterly beginning June 30. The market rate of interest on this date was 7.60%. Sellers Corporation plans to hold this investment for the duration of the bond's contract life. May 26 Purchased 2,200 common shares of BCE at $13.58, plus $200 in transaction fees. June 1 Received a $0.25 per share cash dividend on the Royal Bank common shares. 17 Sold 1,400 Royal Bank common shares at $27.20. 30 Received interest on the Minco Inc. bond. Aug. 5 Received a $0.50 per share cash dividend on the Imperial Oil common shares. Sept. 1 Received a $0.275 per share cash dividend on the remaining Royal Bank common shares. 30 Received interest on the Minco Inc. bond. Dec. 31 Received interest on the Minco Inc. bond. On December 31, 2020, the fair values of the investments held by Safety Development Corporation were: Royal Bank, $27.70; Imperial Oil, $50.63, and BCE, $13.70. Assume the fair value and carrying value of the Minco Inc. bond were equal. Required: 1. Prepare an amortization schedule for the Minco Inc. bond showing only 2020. (Round your intermediate and final answers to the nearest whole dollar amount. Enter all the amounts as positive values.) Cash Interest Received Period Interest Income Discount Amort. Unamortized Discount Carrying Value Apr. 1/20 June 30/20 Sept. 30/20 Dec. 31/20 Safety Development Corporation had relatively large idle cash balances and invested them as follows in securities to be held as non- strategic investments: 2020 Feb. 7 Purchased 2,400 common shares of Royal Bank at $26.70, plus $500 in transaction fees. 19 Purchased 1,400 common shares of Imperial Oil at $52.25, and paid $250 in transaction fees. Apr. 1 Paid $90,241 plus $500 in transaction fees for a 7.20%, four-year, $92,000 Minco Inc. bond that pays interest quarterly beginning June 30. The market rate of interest on this date was 7.60%. Sellers Corporation plans to hold this investment for the duration of the bond's contract life. May 26 Purchased 2,200 common shares of BCE at $13.58, plus $200 in transaction fees. June 1 Received a $0.25 per share cash dividend on the Royal Bank common shares. 17 Sold 1,400 Royal Bank common shares at $27.20. 30 Received interest on the Minco Inc. bond. Aug. 5 Received a $0.50 per share cash dividend on the Imperial Oil common shares. Sept. 1 Received a $0.275 per share cash dividend on the remaining Royal Bank common shares. 30 Received interest on the Minco Inc. bond. Dec. 31 Received interest on the Minco Inc. bond. On December 31, 2020, the fair values of the investments held by Safety Development Corporation were: Royal Bank, $27.70; Imperial Oil, $50.63, and BCE, $13.70. Assume the fair value and carrying value of the Minco Inc. bond were equal. Required: 1. Prepare an amortization schedule for the Minco Inc. bond showing only 2020. (Round your intermediate and final answers to the nearest whole dollar amount. Enter all the amounts as positive values.) Cash Interest Received Period Interest Income Discount Amort. Unamortized Discount Carrying Value Apr. 1/20 June 30/20 Sept. 30/20 Dec. 31/20
