transaction list for req 1
chart of accounts for req 1
req 2
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 Ornamental's fiscal year ends on December 31. No investments were held by Ornamental on December 31, 2020. Mar. 31 Acquired 7% Distribution Transformers Corporation bonds costing $520,000 at face value. Sep. 1 Acquired $1,080, eee of American Instruments 9x bonds at face value. Sep. 38 Received semiannual interest payment on the Distribution Transformers bonds. Oct. 2 Sold the Distribution Transformers bonds for $557,000. Nov. 1 Purchased $1,560, eee of M&D Corporation 5% 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 $1,618,000 $1,640,000 (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. Complete this question by entering your answers in the tabs below. Required 1 Required 2 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 held.) View transaction list View transaction list x X es 1 Record the acquisition of 7% Distribution Transformers Corporation bonds costing $520,000 at face value. 10 onds 2 Record the acquisition of $1,080,000 of American Instruments' 9% bonds at face value. 3 Record the entry for the semiannual interest received on the Distribution Transformers bonds. 4 Record the entry to adjust to fair value on the date of sale of the Distribution Transformers bonds. Credit 5 Record the entry for the reclassification adjustment on the date of sale. Note : - Journal entry has been entered Record entry Clear entry View general Tournal 10 6 Record the entry for sale of Distribution Transformers bonds for $557,000. onds 7 Record the acquisition of $1,560,000 of M&D Corporation 5% bonds at face value. 8 Record the interest accrual for American Instruments bonds. Crec 9 Record the interest accrual for M&D bonds. 10 Record the entry to adjust fair value of the investments at year-end. No journal entry required Cash Fair value adjustment Gain on investments (NI) ord entry Gain on investments (unrealized, NI) Vi Gain on investments (unrealized, OCI) Insurance expense Interest receivable Interest revenue Investment in bonds Loss on investments (NI) Loss on investments (unrealized, NI) Loss on investments (unrealized, OCI) Reclassification adjustment (OCI) Retained earnings y 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.) Income statement: $ 0 Net Income Statement of comprehensive income: Other comprehensive income: 0 Comprehensive income Balance sheet: Assets Current Assets Noncurrent Assets $ 0 Shareholders' Equity
