Question
Please help. I have included screenshots of both requirements The following selected transactions relate to investment activities of Ornamental Insulation Corporation during 2021. The company
Please help. I have included screenshots of both requirements
The following selected transactions relate to investment activities of Ornamental Insulation Corporation during 2021. The company buys debt securities, intending to profit from short-term differences in price and maintaining them in an active trading portfolio. Ornamentals fiscal year ends on December 31. No investments were held by Ornamental on December 31, 2020. Mar. 31 Acquired 8% Distribution Transformers Corporation bonds costing $590,000 at face value. Sep. 1 Acquired $1,470,000 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 $655,000. Nov. 1 Purchased $2,350,000 of M&D Corporation 6% bonds at face value. Dec. 31 Recorded any necessary adjusting entry(s) relating to the investments. The market prices of the investments are American Instruments bonds $ 1,429,000 M&D Corporation bonds $ 2,429,000 (Hint: Interest must be accrued.) Required: 1. Prepare the appropriate journal entry for each transaction or event during 2021, as well as any adjusting entries necessary at year end. 2. Indicate any amounts that Ornamental Insulation would report in its 2021 income statement, 2021 statement of comprehensive income, and 12/31/2021 balance sheet as a result of these investments. Include totals for net income, comprehensive income, and retained earnings as a result of these investments.
The following selected transactions relate to investment activities of Ornamental Insulation Corporation during 2021. The company buys debt securities, intending to profit from short-term differences in price and maintaining them in an active trading portfolio. Ornamental's fiscal year ends on December 31. No investments were held by Ornamental on December 31, 2020. Mar. 31 Acquired 8% Distribution Transformers Corporation bonds costing $590,000 at face value. Sep. 1 Acquired $1,470,000 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 $655,000. Nov. 1 Purchased $2,350,000 of M&D Corporation 6% bonds at face value. Dec. 31 Recorded any necessary adjusting entry(s) relating to the investments. The market prices of the investments are American Instruments bonds M&D Corporation bonds $1,429,000 $2,429,000 (Hint: Interest must be accrued.) Required: 1. Prepare the appropriate journal entry for each transaction or event during 2021, as well as any adjusting entries necessary at year end. 2. Indicate any amounts that Ornamental Insulation would report in its 2021 income statement, 2021 statement of comprehensive income, and 12/31/2021 balance sheet as a result of these investments. Include totals for net income, comprehensive income, and retained earnings as a result of these investments. Complete this question by entering your answers in the tabs below. Required 1 Required 2 Prepare the appropriate journal entry for each transaction or event during 2021, as well as any adjusting entries necessary at year end. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.) View transaction list Journal entry worksheet Record the acquisition of $1,470,000 of American Instruments' 10% bonds at face value. Note: Enter debits before credits. Date General Journal Debit Credit September 01, 2021 Investment in bonds 1,470,000 Cash 1,470,000 Record entry Clear entry View general journal Journal entry worksheet Record the entry to adjust to fair value on the date of sale of the Distribution Transformers bonds. Note: Enter debits before credits. Date General Journal Debit Credit October 02, 2021 Cash 655,000 65,000 Investment in bonds 590,000 Record entry Clear entry View general journal Journal entry worksheet 1 2 3 4 5 6 7 8 9 > Record the entry for sale of Distribution Transformers bonds for $655,000. Note: Enter debits before credits. Date General Journal Debit Credit October 02, 2021 Record entry Clear entry View general journal Journal entry worksheet Record the acquisition of $2,350,000 of M&D Corporation 6% bonds at face value. Note: Enter debits before credits. General Journal Debit Credit Date November 01, 2021 Record entry Clear entry View general journal Journal entry worksheet Record the interest accrual for American Instruments bonds. Note: Enter debits before credits. General Journal Debit Credit Date December 31, 2021 Record entry Clear entry View general journal Journal entry worksheet Record the interest accrual for M&D bonds. Note: Enter debits before credits. Date General Journal Debit Credit December 31, 2021 Record entry Clear entry View general journal Journal entry worksheet
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started