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: Net income Statement of comprehensive income: Comprehensive income Balance sheet: Current Assets Assets S S 0 0
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: Net income Statement of comprehensive income: Comprehensive income Balance sheet: Current Assets Assets S S 0 0
Intermediate Accounting: Reporting And Analysis
3rd Edition
ISBN:9781337788281
Author:James M. Wahlen, Jefferson P. Jones, Donald Pagach
Publisher:James M. Wahlen, Jefferson P. Jones, Donald Pagach
Chapter13: Investments And Long-term Receivables
Section: Chapter Questions
Problem 10RE: On September 30, Franz Corporation notices a decline in value of its investment in held-to-maturity...
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Question
![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 these investments. (Amounts to be deducted should be indicated
with a minus sign.)
Income statement:
Net income
Statement of comprehensive income:
Comprehensive income
Balance sheet:
Current Assets
Investments
Assets
Shareholders' Equity
$
S
S
0](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F5dd1e713-20a5-4384-b92a-26908bf03c20%2F96b1557b-bd2a-4d86-9065-84ed8fff8f2e%2F9slbrjl_processed.jpeg&w=3840&q=75)
Transcribed Image Text: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 these investments. (Amounts to be deducted should be indicated
with a minus sign.)
Income statement:
Net income
Statement of comprehensive income:
Comprehensive income
Balance sheet:
Current Assets
Investments
Assets
Shareholders' Equity
$
S
S
0
![The following selected transactions relate to investment activities of Omamental 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 $540,000 at face value.
Sep. 1 Acquired $1,320,000 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 $580,000.
Nov. 1 Purchased $2,100,000 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
(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.
Complete this question by entering your answers in the tabs below.
Required 1
Den the
Required 2
View transaction list
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.
(If no entry is required for a transaction/event, select "No journal entry required" in the first account field.)
1
a facional ante for arch ternanation as munt de 1871
Journal entry worksheet
$1,274,000
$2,174,000
Note: Enter debits before credits.
Date
March 31, 2021 Investment in bonds
Cash
Dalo
Record the acquisition of 8% Distribution Transformers Corporation bonds
costing $540,000 at face value.
General Journal
Record entry
6
Record entry
7
Record entry
8
Debit
540,000
March 31, 2021 Investment in bonds
9
Date
March 31, 2021 Investment in bonds
Credit
OGNITI AI VUUTTIAI
540,000
>
No journal entry required
Cash
Fair value adjustment
Gain on investments (NI)
Gain on investments (unrealized, NI)
Date
March 31, 2021 Investment in bonds
General Journal
Gain on investments (unrealized, OCI)
Insurance expense
Interest receivable
Interest revenue
Investment in bonds
General Journal
Investment in bonds
Loss on investments (NI)
Loss on investments (unrealized, NI)
Loss on investments (unrealized, OCI)
Retained earnings
||||
IT
TI
D
{](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F5dd1e713-20a5-4384-b92a-26908bf03c20%2F96b1557b-bd2a-4d86-9065-84ed8fff8f2e%2F0fwn9gg_processed.jpeg&w=3840&q=75)
Transcribed Image Text:The following selected transactions relate to investment activities of Omamental 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 $540,000 at face value.
Sep. 1 Acquired $1,320,000 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 $580,000.
Nov. 1 Purchased $2,100,000 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
(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.
Complete this question by entering your answers in the tabs below.
Required 1
Den the
Required 2
View transaction list
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.
(If no entry is required for a transaction/event, select "No journal entry required" in the first account field.)
1
a facional ante for arch ternanation as munt de 1871
Journal entry worksheet
$1,274,000
$2,174,000
Note: Enter debits before credits.
Date
March 31, 2021 Investment in bonds
Cash
Dalo
Record the acquisition of 8% Distribution Transformers Corporation bonds
costing $540,000 at face value.
General Journal
Record entry
6
Record entry
7
Record entry
8
Debit
540,000
March 31, 2021 Investment in bonds
9
Date
March 31, 2021 Investment in bonds
Credit
OGNITI AI VUUTTIAI
540,000
>
No journal entry required
Cash
Fair value adjustment
Gain on investments (NI)
Gain on investments (unrealized, NI)
Date
March 31, 2021 Investment in bonds
General Journal
Gain on investments (unrealized, OCI)
Insurance expense
Interest receivable
Interest revenue
Investment in bonds
General Journal
Investment in bonds
Loss on investments (NI)
Loss on investments (unrealized, NI)
Loss on investments (unrealized, OCI)
Retained earnings
||||
IT
TI
D
{
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