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American Surety and Fidelity buys and sells securities expecting to earn profits on short-term differences in price. For the first 11 months of 2016, gains from selling trading securities totaled $7 million, losses were $8 million, and the company had earned $5 million in investment revenue. The following selected transactions relate to American's trading account during December 2016, and the first week of 2017. The company's fiscal year ends on December 31. No trading securities were held by American on December 1, 2016.

2016
Dec. 12	Purchased FF&G Corporation bonds for $19 million.
13	Purchased 2 million Ferry Intercommunications common shares for $28 million.
15	Sold the FF&G Corporation bonds for $19.4 million.
22	Purchased U.S. Treasury bills for $88 million and Treasury bonds for $85 million.
23	Sold half the Ferry Intercommunications common shares for $10 million.
26	Sold the U.S. Treasury bills for $89 million.
27	Sold the Treasury bonds for $81 million.
28	Received cash dividends of $200,000 from the Ferry Intercommunications common shares.
31	Recorded any necessary adjusting entry(s) and closing entries relating to the investments. The market price of the Ferry Intercommunications stock was $10 per share.
2017
Jan. 2	Sold the remaining Ferry Intercommunications common shares for $10.5 million.
5	Purchased Warehouse Designs Corporation bonds for $54 million.

Required:

1.

Prepare the appropriate journal entry for each transaction or event during 2016. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field. Enter your answers in millions rounded to 1 decimal place, (i.e., 5,500,000 should be entered as 5.5).) Record the purchase of FF&G Corporation bonds for $19 million. 2 Record the purchase of 2 million Ferry Intercommunications common shares for $28 million. 3 Record the sale of the FF&G Corporation bonds for ${{19.4:#,###.0}} million. 4 Record the purchase of U.S. Treasury bills for $88 million and Treasury bonds for $85 million. 5 Record the sale of half the Ferry Intercommunications common shares for $10 million. 6 Record the sale of the U.S. Treasury bills for $89 million. 7 Record the sale of the Treasury bonds for $81 million. 8 Record the receipt of cash dividends of $200,000 from the Ferry Intercommunications common shares. 9 Record the adjusting entry for fair value adjustment. 10 Record the closing entry. Indicate any amounts that American would report in its 2016 balance sheet and income statement as a result of these investments. (Amounts to be deducted should be indicated with a minus sign. Enter your answers in millions rounded to 1 decimal place, (i.e., 5,500,000 should be entered as 5.5).) ($ in millions) Balance sheet (short-term investment): Trading Securities $ Less: Fair value adjustment Total $ Income statement: Investment revenue $ Gain on sale of investments Loss on sale of investments Net unrealized holding gains and lossesI/S Prepare the appropriate journal entry for each transaction or event during 2017. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field. Enter your answers in millions rounded to 1 decimal place, (i.e., 5,500,000 should be entered as 5.5).) 1 Record the sale of the remaining Ferry Intercommunications common shares for $10.5 million. 2 Record the purchase of the Warehouse Designs Corporation bonds for $54 million. 3 Record the fair value adjustment assuming the fair value of the Warehouse Designs bonds did not change.

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