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. 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 $460,000 at face value.
Sep.		1		Acquired $1,080,000 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 $515,000.
Nov.		1		Purchased $1,700,000 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	$	1,036,000
M&D Corporation bonds	$	1,766,000

(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.

JE 1: Record the acquisition of 8% Distribution Transformers Corporation bonds costing $460,000 at face value. (03/31/21)

JE 2: Record the acquisition of $1,080,000 of American Instruments' 10% bonds at face value (09/01/21)

JE 3: Record the entry for the semiannual interest received on the Distribution Transformers bonds. (09/30/21)

JE4: Record the entry to adjust to fair value on the date of sale of the Distribution Transformers bonds (10/02/21)

JE 5: Record the entry for sale of distribution transformers bonds for $515,000 (10/02/21)

JE 6: Record the acquisition of $1,700,000 of M&D Corporation 6% bonds at face value (11/01/21)

JE 7: Record the interest accrual for American Instruments bonds. (12/31/21)

JE 8: Record the interest accrual for M&D bonds(12/31/21)

JE9: Record the entry to adjust fair value of the investments 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.

5 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. 3 points Mar. 31 Acquired 8% Distribution Transformers Corporation bonds costing $460,000 at face value. Sep. 1 Acquired $1,080,000 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 $515,000. Nov. 1 Purchased $1,700,000 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 $1,036,000 $1,766,000 (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. No Date General Journal Debit Credit 1 March 31, 2021 460,000 Gain on investments (NI) Cash 460,000 2 September 01, 20 Investment in bonds 1,080,000 Cash 1,080,000 3 September 30, 20. Cash 18,400 Interest revenue 18,400 4 x 515,000 X October 02, 2021 Cash Investment in bonds Gain on investments (NI) 460,000 X 55,000 X 5 X 1,700,000 October 02, 2021 Investment in bonds Cash 1,700,000 X 6 November 01, 202 Interest receivable 36,000 X Interest revenue X 36,000 X 7 December 31, 202 Interest receivable 17,000 Interest revenue 17,000 X 4 October 02, 2021 Cash X 515,000 X Investment in bonds 460,000 X 55,000 X Gain on investments (NI) 5 October 02, 2021 Investment in bonds x 1,700,000 Cash 1,700,000 X 6 November 01, 202 Interest receivable 36,000 Interest revenue 36,000 X 7 December 31, 202 Interest receivable 17,000 X Interest revenue 17,000 X 8 December 31, 202 Gain on investments (NI) 44,000 Fair value adjustment 44,000 9 December 31, 202 Fair value adjustment 66,000 X Gain on investments (NI) 66,000 Income statement: $ Interest receivable Gain on investments 71,400 55,000 $ 126,400 Net income Statement of comprehensive income: Net income $ 22,000 X $ 22,000 Comprehensive income Balance sheet: Assets Current Assets Interest receivable 530000 X $ 53,000 Investments Investment in bonds $ 2,780,000 22,000 $ 2,802,000 Add: Fair value adjustment Shareholders' Equity Gain on investments $ 22,000 X