Answer Happy

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.
(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.