The following selected transactions relate to investment activities of Ornamental Insulation Corporation during 2021. The company buys debt securities, intending to profit from short-term differences in price and maintaining them in an active trading portfolio. Ornamental's 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 $570,000 at face value. Sep. 1 Acquired $1,410,000 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 $625,000. Nov. 1 Purchased $2,250,000 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 M&D Corporation bonds $1,367,000 $2,327,000 (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. 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. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.) No Date General Journal Credit Debit 570,000 March 31, 2021 Investment in bonds Cash 570,000 September 01, 202 Investment in bonds 1,410,000 Cash 1,410,000 September 30, 202 Cash 22,800 Interest revenue 22,800 October 02, 2021 No Transaction Recorded 625,000 October 02, 2021 Cash Investment in bonds Loss on investments (unrealized, NI) 570,000 55,000 November 01, 2021 Investment in bonds 2,250,000 Cash 2,250,000 7 December 31, 2021 Interest receivable Interest revenue 69,500 December 31, 2021 Interest receivable Interest revenue 69,500 X 9 77,000 X December 31, 2021 Investment in bonds Gain on investments (unrealized, NI) Investment in bonds 43,000 X 34,000 Required 1 Required 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. (Amounts to be deducted should be indicated with a minus sign.) Show less Income statement: Interest revenue Gain on investments Statement of comprehensive income: Net income Other comprehensive income Balance sheet: Assets Current Assets Gain on investments $ 69,500 Investments stments Investment in bonds $ 3,694,000 X $ 3,694,000 Shareholders' Equity Interest revenue $ 69,500 Required 1 Required 2 )
