Question
The following selected transactions relate to investment activities of Ornamental Insulation Corporation during 2018. The company buys debt securities, intending to profit from short-term differences
The following selected transactions relate to investment activities of Ornamental Insulation Corporation during 2018. The company buys debt securities, intending to profit from short-term differences in price and maintaining them in an active trading portfolio. Ornamentals fiscal year ends on December 31. No investments were held by Ornamental on December 31, 2017.
Mar. | 31 | Acquired 8% Distribution Transformers Corporation bonds costing $480,000 at face value. | ||
Sep. | 1 | Acquired $1,140,000 of American Instruments' 10% bonds at face value. | ||
Sep. | 30 | Received semiannual interest payment on the Distribution Transformers bonds. | ||
Oct. | 2 | Sold the Distribution Transformers bonds for $545,000. | ||
Nov. | 1 | Purchased $1,800,000 of M&D Corporation 6% 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 | $ | 1,098,000 | |
M&D Corporation bonds | $ | 1,868,000 |
Required Indicate any amounts that Ornamental Insulation would report in its 2018 income statement, 2018 statement of comprehensive income, and 12/31/2018 balance sheet as a result of these investments. (Amounts to be deducted should be indicated with a minus sign.) Income statement: Interest revenue $ 75,200 Investment revenue Net income $ 75,200 Statement of comprehensive income: Net income Balance sheet: Assets Current Assets Interest receivable Investments $ 0 Shareholders Equity Required 1 Required 2
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