The following selected transactions relate to investment activities of Ornamental Insulation Corporation during 2021. The company buys debt securities, not intending to profit from short-term differences in price and not necessarily to hold debt securities to maturity, but to have them available for sale in years when circumstances warrant. Ornamentals fiscal year ends on December 31. No investments were held by Ornamental on December 31, 2020.

Mar.		31		Acquired 5% Distribution Transformers Corporation bonds costing $600,000 at face value.
Sep.		1		Acquired $1,200,000 of American Instruments 7% bonds at face value.
Sep.		30		Received semiannual interest payment on the Distribution Transformers bonds.
Oct.		2		Sold the Distribution Transformers bonds for $645,000.
Nov.		1		Purchased $1,600,000 of M&D Corporation 3% 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	$	1,130,000
M&D Corporation bonds	$	1,680,000

(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. For any sales, prepare entries to update the fair-value adjustment, record any reclassification adjustment, and record the sale. 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.

Prepare the appropriate journal entry for each transaction or event during 2021, as well as any adjusting entries necessary at year end. For any sales, prepare entries to update the fair-value adjustment, record any reclassification adjustment, and record the sale. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.)

No	Date	General Journal	Debit	Credit
1	March 31, 2021	Investment in bondsselected answer correct	600,000selected answer correct	not attempted
		Cashselected answer correct	not attempted	600,000selected answer correct
2	September 01, 2021	Investment in bondsselected answer correct	1,200,000selected answer correct	not attempted
		Cashselected answer correct	not attempted	1,200,000selected answer correct
3	September 30, 2021	Cashselected answer correct	15,000selected answer correct	not attempted
		Interest receivableselected answer incorrect	not attempted	15,000selected answer correct
4	October 02, 2021	Cashselected answer incorrect	535,000selected answer incorrect	not attempted
		Investment in bondsselected answer incorrect	not attempted	535,000selected answer incorrect
7	November 01, 2021	Investment in bondsselected answer correct	1,500,000selected answer incorrect	not attempted
		Cashselected answer correct	not attempted	1,500,000selected answer incorrect
8	December 31, 2021	Interest receivableselected answer correct	10,000selected answer incorrect	not attempted
		Interest receivableselected answer incorrect	not attempted	10,000selected answer incorrect
9	December 31, 2021	Investment in bondsselected answer incorrect	70,000selected answer incorrect	not attempted
		Fair value adjustmentselected answer incorrect	not attempted	10,000selected answer incorrect

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.)

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