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.
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.
(Hint: Interest must be accrued.)