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Ornamental Insulation Corporation - what cash do I report on the balance sheet?

The following selected transactions relate to investment activities of Ornamental 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 $450,000 at face value. Sep. 1 Acquired $1,050,000 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 $500,000. Nov. 1 Purchased $1,650,000 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 $1,005,000 $1,715,000 (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. 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.) Date General Journal Credit No 1 Debit 450,000 March 31, 2021 Investment in bonds Cash 450,000 2 1,050,000 September 01, 20 Investment in bonds Cash 1,050,000 3 September 30, 20. Cash 18,000 Interest revenue 18,000 4 50,000 October 02, 2021 Fair value adjustment Gain on investments (unrealized, NI) 50,000 5 500,000 October 02, 2021 Cash Investment in bonds Fair value adjustment 450,000 50,000 November 01, 202 Investment in bonds 1,650,000 Cash 1,650,000 35,000 December 31, 202 Interest receivable Interest revenue 35,000 8 16,500 December 31, 202 Interest receivable Interest revenue 16,500 9 December 31, 202 Fair value adjustment 20,000 Gain on investments (unrealized, NI) 20,000 Required 1 Required 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. (Amounts to be deducted should be indicated with a minus sign.) Show less Income statement: Interest revenue Gain on investments $ 69,500 70,000 $ 139,500 Net income Statement of comprehensive income: Net income $ 139,500 $ 139,500 Comprehensive income Balance sheet: Assets Current Assets Cash Interest receivable 51,500 Investments Investment in bonds Add: Fair value adjustment Shareholders' Equity $ 2,700,000 20,000 $ 2,720,000 Retained earnings $ 139,500 The following selected transactions relate to investment activities of Ornamental 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 $450,000 at face value. Sep. 1 Acquired $1,050,000 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 $500,000. Nov. 1 Purchased $1,650,000 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 $1,005,000 $1,715,000 (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. 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.) Date General Journal Credit No 1 Debit 450,000 March 31, 2021 Investment in bonds Cash 450,000 2 1,050,000 September 01, 20 Investment in bonds Cash 1,050,000 3 September 30, 20. Cash 18,000 Interest revenue 18,000 4 50,000 October 02, 2021 Fair value adjustment Gain on investments (unrealized, NI) 50,000 5 500,000 October 02, 2021 Cash Investment in bonds Fair value adjustment 450,000 50,000 November 01, 202 Investment in bonds 1,650,000 Cash 1,650,000 35,000 December 31, 202 Interest receivable Interest revenue 35,000 8 16,500 December 31, 202 Interest receivable Interest revenue 16,500 9 December 31, 202 Fair value adjustment 20,000 Gain on investments (unrealized, NI) 20,000 Required 1 Required 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. (Amounts to be deducted should be indicated with a minus sign.) Show less Income statement: Interest revenue Gain on investments $ 69,500 70,000 $ 139,500 Net income Statement of comprehensive income: Net income $ 139,500 $ 139,500 Comprehensive income Balance sheet: Assets Current Assets Cash Interest receivable 51,500 Investments Investment in bonds Add: Fair value adjustment Shareholders' Equity $ 2,700,000 20,000 $ 2,720,000 Retained earnings $ 139,500

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