Safety Development Corporation had relatively large idle cash balances and invested them as follows in securities to be held as non-strategic investments:

2020Feb.7Purchased 2,200 common shares of Royal Bank at $26.50, plus $500 in transaction fees. 19 Purchased 1,200 common shares of Imperial Oil at $51.75, and paid $250 in transaction fees. Apr.1 Paid $88,258 plus $500 in transaction fees for a 6.8%, four-year, $90,000 Minco Inc. bond that pays interest quarterly beginning June 30. The market rate of interest on this date was 7.2%. Sellers Corporation plans to hold this investment for the duration of the bonds contract life. May26 Purchased 2,000 common shares of BCE at $13.38, plus $200 in transaction fees. June1 Received a $0.25 per share cash dividend on the Royal Bank common shares.17Sold 1,200 Royal Bank common shares at $27.00.30Received 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.30Received interest on the Minco Inc. bond. Dec.31 Received interest on the Minco Inc. bond.

On December 31, 2020, the fair values of the investments held by Safety Development Corporation were: Royal Bank, $27.50; Imperial Oil, $50.13; and BCE, $13.50. Assume the fair value and carrying value of the Minco Inc. bond were equal.

Required: 1. Prepare an amortization schedule for the Minco Inc. bond showing only 2020. (Round your intermediate and final answers to the nearest whole dollar amount. Enter all the amounts as positive values.)

2. Prepare journal entries to record the investment activity including the appropriate fair value adjustment on December 31. (Round your intermediate and final answers to the nearest whole dollar amount.)

3. Show how the investments will be reported on the December 31, 2020, balance sheet. (Round your intermediate and final answers to the nearest whole dollar amount.)

Analysis Component: If the fair value adjustment is not recorded by Safety Development Corporation, what is the impact on the financial statements?