Safety Development Corporation had relatively large idle cash balances and invested them as follows in securities to be held as non strategic investments: 2020 Feb.7 Purchased 2,900 common shares of Royal Bank at $27.20, plus $500 in transaction fees. 19 Purchased 1,900 common shares of Imperial Oil at $53.50, and paid $250 in transaction fees. Apr.1 Paid $95,198 plus $500 in transaction fees for a 8.20%, four year, $97,000 Minco Inc. bond that pays interest quartely beginning June 30. The market rate of interest on this date was 8.60%. Sellers Corporation plans to hold this investment for the duration of the bonds contract life. May26 Purchased 2,700 common shares of BCE at $14.08, plus $200 in transaction fees. June1 Received a $0.25 per share cash dividend on the Royal bank commo shares. 17 Sold 1,900 Royal bank common shares at $27.70. 30 Received interest on the Minco Inc. bond. Aug.5 Received a $0.50 per share cash dividend on the Imperial Oil common shares. Sept.1 Received a $0.275 per share cash dividend on the remaining Royal bank common shares. 30 Received interest on the Minco Inc. bond. Dec.31 Received interest on the Minco Inc. bond.

1. Prepare an amortization schedule for the Minco Inc. bond showing only 2020.

2. Prepare journal entries to record the investment activity including the appropriate fair value adjustment ON December 31. 3. Show how the investments will be reported on the December 31, 2020, balance sheet.

Analysis component: If the fair value adjustment is not recorded by Safety development Corporation, what is the impact on the financial statements.