The following selected transactions relate to investment activities of Ornamental Insulation Corporation during 2024. 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, 2023. March 31 Acquired 8% Distribution Transformers Corporation bonds costing $518,008 at face value. September 1 Acquired $1,238,800 of American Instruments' 18% bonds at face value. September 38 Received semiannual interest payment on the Distribution Transformers bonds. October 2 Sold the Distribution Transformers bonds for $590,000. November 1 Purchased $1,950,088 of M&D Corporation 6% bonds at face value. December 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 2024, as well as any adjusting entries necessary at year end. 2. Indicate any amounts that Ornamental Insulation would report in its 2024 income statement, 2024 statement of comprehensive income, and 12/31/2024 balance sheet as a result of these investments. Include totals for net income, comprehensive income. and retained earnings as a result of these investments. Ignore income taxes. Complete this question by entering your answers in the tabs below. $ 1,181,000 $ 2,821,000 Required 1 Required 2 Prepare the appropriate journal entry for each transaction or event during 2024, as well as any adjusting entries necessary at year end. Note: If no entry is required for a transaction/event, select "No journal entry required in the first account field. View transaction llest View journal entry worksheet Date March 31, 2024 1 No 1 2 September 01, 2024 Investment in bonds Cash Investment in bonds Cash General Journal Required 1 Debit Required 2 > 510,000 1,230,000 Credit 510,000 1,230,000

The following selected transactions relate to investment activities of Ornamental Insulation Corporation during 2024. 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, 2023. March 31 Acquired 8% Distribution Transformers Corporation bonds costing $518,008 at face value. September 1 Acquired $1,238,800 of American Instruments' 18% bonds at face value. September 38 Received semiannual interest payment on the Distribution Transformers bonds. October 2 Sold the Distribution Transformers bonds for $590,000. November 1 Purchased $1,950,088 of M&D Corporation 6% bonds at face value. December 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 2024, as well as any adjusting entries necessary at year end. 2. Indicate any amounts that Ornamental Insulation would report in its 2024 income statement, 2024 statement of comprehensive income, and 12/31/2024 balance sheet as a result of these investments. Include totals for net income, comprehensive income. and retained earnings as a result of these investments. Ignore income taxes. Complete this question by entering your answers in the tabs below. $ 1,181,000 $ 2,821,000 Required 1 Required 2 Prepare the appropriate journal entry for each transaction or event during 2024, as well as any adjusting entries necessary at year end. Note: If no entry is required for a transaction/event, select "No journal entry required in the first account field. View transaction llest View journal entry worksheet Date March 31, 2024 1 No 1 2 September 01, 2024 Investment in bonds Cash Investment in bonds Cash General Journal Required 1 Debit Required 2 > 510,000 1,230,000 Credit 510,000 1,230,000

Financial Accounting

14th Edition

ISBN:9781305088436

Author:Carl Warren, Jim Reeve, Jonathan Duchac

Publisher:Carl Warren, Jim Reeve, Jonathan Duchac

Chapter15: Investments And Fair Value Accounting

Section: Chapter Questions

Problem 28E

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