Problem 12-5 Various transactions related to securities available-for-sale [LO12-3]

The following selected transactions relate to investment activities of Ornamental Insulation Corporation. The company buys securities,notintending to profit from short-term differences in price andnotnecessarily 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, 2015.

2016
Feb.	21	Acquired Distribution Transformers Corporation common shares costing $410,000.
Mar.	18	Received cash dividends of $8,500 on the investment in Distribution Transformers common shares.
Sep.	1	Acquired $930,000 of American Instruments' 10% bonds at face value.
Oct.	20	Sold the Distribution Transformers shares for $440,000.
Nov.	1	Purchased M&D Corporation common shares costing $1,450,000.
Dec.	31	Recorded any necessary adjusting entry(s) relating to the investments. The market prices of the investments are:

American Instruments bonds	$	881,000
M&D Corporation shares	$	1,511,000

(Hint: Interest must be accrued for the American Instruments? bonds.)

2017
Jan.	20	Sold the M&D Corporation shares for $1,536,000.
Mar.	1	Received semiannual interest of $46,500 on the investment in American Instruments bonds.
Aug.	12	Acquired Vast Communication common shares costing $660,000.
Sept.	1	Received semiannual interest of $46,500 on the investment in American Instruments bonds.
Dec.	31	Recorded any necessary adjusting entry(s) relating to the investments. The market prices of the investments are:

Vast Communication shares	$	680,000
American Instruments bonds	$	861,000