On December 31, 2017, the temporary investments owned by Good Investments Limited (accounted for using the FV-NI model) were as follows:

Description QuantityCostMarket Value

Newcourt Inc. - common shares300$ 14,100 $42 per share

Hydro One - $10,000, 6% bond1$9,39998

The Hydro One bond pays interest each June 30 and December 31 at a rate of 6% per annum, on the face value of the bond.(3% every 6 months)This bond was purchased on July 1, 2017 for $9,326. The market rate of interest on that date was 8% and the effective interest method is used to amortize any premium or discount.

The following transactions took place in 2018:

2018

Jan 2Purchased 3,000 shares of the 100,000 outstanding common shares of Barrette

Corporation @ $7 per share. It is the intention of management to account for these

shares using the FV-NI model.

Feb 1 Sold 200 Newcourt shares @ $47.50 per share

May 1Purchased 98 common shares of Bank of Nova Scotia at $100 per share plus brokerage

fees of $200.

May 15Purchased an additional 1,000 common shares of Barrette Corporation @ $8 per share.

June 30Received semi-annual interest on the Hydro One bond.

Aug 31Purchased a $40,000, 8% bond from Molson Limited for $43,412 plus accrued

interest.The marked rate of interest in effect on this date was 6%.These bonds pay

interest each June 30 and December 31 and will mature on June 30, 2023.It is the

intention of management to hold these bonds until maturity and therefore will

account for this investment using the amortized cost model.

(Use the effective interest method to amortize any premium or discount)

Oct 1Sold the Hydro One bond @ 99 plus accrued interest

Dec 1Received cash dividends as follows:

Bank of Nova Scotia - $3 per share

Newcourt Inc.- $2 per share

Dec 31Received the semi-annual bond interest on the Molson Limited bond.

Dec 31Received a $1.50 per common share cash dividend from Barrette Corporation.

Dec 31The market values of the temporary investments were as follows:

Newcourt Inc.$50 per share

Bank of Nova Scotia$ 108 per share

Barrette Corporation - common shares$8 per share

Molson Limited98

(1)Prepare journal entries to record all of the transactions for 2018.

(2)Make necessary year-end adjusting entries as at December 31, 2018.

(3)Assume that Good Investments Limited owned 50% of the common shares of Barrette Corporation and Barrette Corporation reported a Net Income of $125,000 for the year ended December 31, 2018.Prepare the journal entry to account for this information.