The following selected transactions relate to investment activities of Ornamental Insulation Corporation during 2021. The companybuys debt securities, intending to profit from short-term differences in price and maintaining them in an active trading portfolioOrnamental's fiscal year ends on December 31. No investments were held by Ornamental on December 31, 2020Mar. 31 Acquired 8% Distribution Transformers Corporation bonds costing $600,000 at face value.Sep. 1 Acquired $1,5ee,eee 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 $670,000.Nov. 1 Purchased $2,400,000 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 areAmerican Instruments bondsM&D Corporation bonds$1,460,000$2,480,000(Hint Interest must be accrued.)Required:1. Prepare the appropriate journal entry for each transaction or event during 2021, as wellendanyentries necessary at year.2. Indicate any amounts that Ornamental Insulation would report in its 2021 income statement, 2021 statement of comprehensiveincome, and 12/31/2021 balance sheet as a result of these investments. Include totals for net income, comprehensive income, andretained earnings as a result of these investments. Required 1 Required 2Indicate any amounts that Ornamental Insulation would report in its 2021 income statement, 2021 statement ofcomprehensive 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 indicatedwith a minus sign.)Income statement:Not incomeStatement of comprehensive income:Comprehensive incomeBalance sheet:Current AssetsAssets$00

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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.) Income statement: Not income Statement of comprehensive income: Comprehensive income Balance sheet: Current Assets Assets $

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.) Income statement: Not income Statement of comprehensive income: Comprehensive income Balance sheet: Current Assets Assets $

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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