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 8% Distribution Transformers Corporation bonds costing $550,000 at face value.
Sep.		1		Acquired $1,125,000 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 $590,000.
Nov.		1		Purchased $1,550,000 of M&D Corporation 6% bonds costing 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	$	1,060,000
M&D Corporation bonds	$	1,625,000

(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.

No General Journal Credit Date March 31, 2021 Debit 550,000 1 Investment in bonds Cash 550,000 2 1,125,000 September 01, 202 Investment in bonds Cash 1,125,000 3 22,000 September 30, 202 Cash Interest revenue 22,000 4 40,000 October 02, 2021 Fair value adjustment Gain on investments (unrealized, OCI) 40,000 5 X 40,000 October 02, 2021 Gain on investments (unrealized, OCI) Gain on investments (NI) 40,000 6 590,000 October 02, 2021 Cash Investment in bonds Fair value adjustment 540,000 50,000 7 1,550,000 November 01, 202 Investment in bonds Cash 1,550,000 8 37,500 December 31, 202 Interest receivable Interest revenue 37,500 9 15,500 December 31, 202 Interest receivable Interest revenue >> 15,500 10 65,000 65,000 December 31, 202 Loss on investment (unrealized, OCI) Fair value adjustment Fair value adjustment Gain on investments (unrealized, OCI) X 75,000 75,000 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.) Show less >> 40,000 $ 40,000 $ 40,000 Income statement: Interest revenue Gain on investments Accumulated other comprehensive income Net income Statement of comprehensive income: Net income Other comprehensive income: Gain on investments Accumulated other comprehensive income Comprehensive income Balance sheet Assets Current Assets Interest receivable $ 10,000 X $ 50,000 Noncurrent Assets 0 Shareholders' Equity