EVENTS:

On January 1, 2020, your company purchased 8,000 shares of Another Companys $10 par common stock for $18 per share in cash. On that date, Another Companys assets and liabilities had a book value equal to market value except for their building which had a market value which was $30,000 higher than its book value and had a 20-year remaining life. Other events which took place related to this investment were:

2020

1. Received $4,000 in cash dividends.
2. On December 31, 2020:

1. Another Companys stock had a market value of $19 per share.
2. Another Company reported net income of $60,000.

2021

3. Received a 5% stock dividend
4. On December 31, 2020:

1. Another Companys stock had a market value of $21 per share.
2. Another Company reported net income of $80,000.

2022

5. Sold 1/5 of your shares for $23.00 per share in cash

QUESTIONS:

1. Assuming the 8,000 shares you purchased represented 40% of the outstanding shares of Another Company and you plan to hold on to the shares for several years, prepare all entries for 2020 and 2021 for the above information.
2. Show how the entries in 1. above would change your net income in 2020 and in 2021.
3. Show how the Investment account in part 1. would be reported on the balance sheet (what section, what account(s) and what amounts) on December 31, 2020.
4. When buying bonds of another company, which type(s) of bond investments are marked to market at the end of each year and where are the unrealized gains or unrealized losses on these investments in bonds reported?