Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

I just need the wrong answers. The following selected transactions relate to investment activities of Ornamental Insulation Corporation during 2018. The company buys debt securities,

image text in transcribedimage text in transcribedimage text in transcribed

I just need the wrong answers.

The following selected transactions relate to investment activities of Ornamental Insulation Corporation during 2018. The company buys debt securities, not intending to profit from short-term differences in price and not necessarily to hold debt securities to maturity but to have them available for sale when circumstances warrant. Ornamental's fiscal year ends on December 31. No investments were held by Ornamental on December 31, 2017 25 points Mar. 31 Acguired 8 Distribution Transformers corporation bonds costing $400,000 at face value sep . 1 Acquired $900,000 of American Instruments' 10 bonds at face value Sep. 30 Received semiannual interest payment on the Distribution Transformers bonds oct. 2 Sold the Distribution Transformers bonds for $425,000 Nov. 1 Purchased $1,400,000 of M&D Corporation 63 bonds costing at face value Dec. 31 Recorded any necessary adjusting entry(s) relating to the investments. The market prices of the investments are: $ 850,000 $1,460,000 American Instruments bonds M&D Corporation bonds (Hint: Interest must be accrued.) Required 1. Prepare the appropriate journal entry for each transaction or event during 2018, as well as any adjusting entries necessary at year end. For any sales, prepare entries to update the fair-value adjustment, record any reclassification adjustment, and record the sale. 2. Indicate any amounts that Ornamental Insulation would report in its 2018 income statement, 2018 statement of comprehensive income, and 12/31/2018 balance sheet as a result of these investments. Hint interest must be accruea.) Required 1. Prepare the appropriate journal entry for each transaction or event during 2018, as well as any adjusting entries necessary at year end. For any sales, prepare entries to update the fair-value adjustment, record any reclassification adjustment, and record the sale. 2. Indicate any amounts that Ornamental Insulation would report in its 2018 income statement, 2018 statement of comprehensive income, and 12/31/2018 balance sheet as a result of these investments. points Answer is not complete. Complete this question by entering your answers in the tabs below Required 1Required 2 Prepare the appropriate journal entry for each transaction or event during 2018, as well as any adjusting entries necessary at year end. For any sales, prepare entries to update the fair-value adjustment, record any reclassification adjustment, and record the sale. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.) Show lessA No Date General Journal Debit Credit March 31, 2018Investment in Distribution Transformers bonds 400,000 Cash 400,000 September 01, 201Investment in American Instruments bonds 900,00o Cash 900,000 3September 30, 201 Cash 16,000 Interest revenue 16,000 October 02, 2018 Fair value adjustment 25.0000 Unrealized holding gain-oCi 25,000 October 02, 2018 Cash Unrealized holding gain October 02, 2018 Cash 25,000 Investment in Distribution Transformers bonds 400,000 Gain on sale of investments 25,000 November 01, 201 Investment in M&D Corporation bonds 1,400,000 Cash 1,400,000 Mc Graw 1 of 4 Next Sep. 1 Acquired $900,000 of American Instruments, 10 bonds at face value Sep. 30 Received semiannual interest payment on the Distribution Transformers bonds oct. 2 Sold the Distribution Transformers bonds for $425,000 Nov. 1 Purchased $1,400,000 of M&D Corporation 63 bonds costing at face value Dec. 31 Recorded any necessary adjusting entry(s) relating to the investments. The market prices of the investments 25 points $ 850,000 $1,460,000 American Instruments bonds M&D Corporation bonds (Hint: Interest must be accrued.) Required 1. Prepare the appropriate journal entry for each transaction or event during 2018, as well as any adjusting entries necessary at year end. For any sales, prepare entries to update the fair-value adjustment, record any reclassification adjustment, and record the sale. 2. Indicate any amounts that Ornamental Insulation would report in its 2018 income statement, 2018 statement of comprehensive income, and 12/31/2018 balance sheet as a result of these investments. Answer is not complete. Complete this question by entering your answers in the tabs below Required 1Required 2 Indicate any amounts that Ornamental Insulation would report in its 2018 income statement, 2018 statement of comprehensive income, and 12/31/2018 balance sheet as a result of these investments. (Amounts to be deducted should be indicated with a minus sign.) Income statement: Interest revenue $ 60,000 25.000 Gain on sale of investments Net income $ 85.000 Statement of comprehensive income Net income $ 85,000 Unrealized holding gain-OC Accumulated unrealized holding gains $ 35.000 35,000 Accumulated unrealized gains $35.000 Balance sheet: Assets Current Assets $36.000 2,310,000

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Human Resource Management

Authors: Robert L. Mathis, John H. Jackson

13th Edition

053845315X, 978-0538453158

More Books

Students also viewed these Accounting questions