Problem 12-5 (Algo) Various transactions related to trading securities (L012-1, 12-3) 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 ex Distribution Transformers Corporation bonds costing $490,000 at face value Sep. 1 Acquired $1,170,000 of Anerican 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 $560,000 1 Purchased $1,050,000 of MD Corporation % 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 MD Corporation bonds $1,139,000 $1,919,000 (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. 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 2 5 6 7 8 9 Record the acquisition of 8% Distribution Transformers Corporation bonds costing $490,000 at face value Note Enter debits before credits Date General Journal Debit Credit March 31, 2021 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 held.) View transaction list Inds 1 Record the acquisition of 8% Distribution Transformers Corporation bonds costing $490,000 at face value 2 Record the acquisition of $1,170,000 of American Instruments 10% bonds at face value. 3 Record the entry for the semiannual interest received on the Distribution Transformers bonds 4 Record the entry to adjust to fair value on the date of sale of the Distribution Transformers bonds 5 Record the entry for sale of Distribution Transformers bonds for $500,000 Credit Note Journal entry has been entered Record entry Clear entry View general Journal 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. (Amounts to be deducted should be indicated with a minus sign) Income statement Net income Statement of comprehensive income: Comprehensive income Balance sheet Assets Current Assets Investments Shareholders Equity
