Question 1:

Rantzow-Lear Company buys and sells debt securities expecting to earn profits on short-term differences in price, and holds these investments in its trading portfolio. The companys fiscal year ends on December 31. The following selected transactions relating to Rantzow-Lears trading account occurred during December 2021 and the first week of 2022.

2021
Dec.		17		Purchased 135 Grocers Supply Corporation bonds at par for $607,500.
		28		Received interest of $3,400 from the Grocers Supply Corporation bonds.
		31		Recorded any necessary adjusting entry relating to the Grocers Supply Corporation bonds. The market price of the bond was $5,000 per bond.
2022
Jan.		5		Sold the Grocers' Supply Corporation bonds for $641,250.

Required: 1. Prepare the appropriate journal entry or entries for each transaction. 2. Indicate any amounts that Rantzow-Lear Company would report in its 2021 balance sheet and income statement as a result of this investment.