a) | ||||
Date | Account Title | Debit | Credit | |
2020 | ||||
Mar.31 | Investment in Distribution Transformers shares | $4,00,000.00 | ||
Cash | $4,00,000.00 | |||
Sept.1 | Investment in American Instruments bonds | $9,00,000.00 | ||
Cash | $9,00,000.00 | |||
Sept.30 | Cash ($400,000 x 8%/2) | $16,000.00 | ||
Investment revenue | $16,000.00 | |||
Oct.2 | Cash | $4,25,000.00 | ||
Investment in Distribution Transformers | $4,00,000.00 | |||
Gain on sale of investments | $25,000.00 | |||
Nov.1 | Investment in M&D Corporation shares | $14,00,000.00 | ||
Cash | $14,00,000.00 | |||
Dec.31 | Investment revenue receivable | $30,000.00 | ||
Investment revenue ($900000 x 10% x 4/12) | $30,000.00 | |||
Dec.31 | Investment revenue receivable | $14,000.00 | ||
Investment revenue ($1400000 x 6% x 2/12) | $14,000.00 | |||
Dec.31 | Fair value adjustment (calculated below) | $10,000.00 | ||
Net unrealized holding gains and losses–OCI | $10,000.00 | |||
Available for sale securities | Cost | Fair market Value | Profit/Loss | |
M & D Corporation shares | $14,00,000.00 | $14,60,000.00 | $60,000.00 | |
American Instruments bonds | $9,00,000.00 | $8,50,000.00 | $(50,000.00) | |
Totals | $23,00,000.00 | $23,10,000.00 | $10,000.00 | |
b) | ||||
Income Statement | ||||
Investment Revenue = $16000 + $30000 + 14000 | $60,000.00 | |||
Gain on sale of investments | $25,000.00 | |||
Unlike for trading securities, unrealized holding gains and losses are not included in income for securities available-for-sale | ||||
Statement of comprehensive income | ||||
Net unrealized holding gains and losses on investments | $10,000.00 | |||
Balance sheet: | ||||
Current Assets | ||||
Investment revenue receivable | $30,000.00 | |||
Securities available-for-sale | $23,00,000.00 | |||
Add: Fair value adjustment | $10,000.00 | $23,10,000.00 | ||
Shareholders’ Equity | ||||
Net unrealized holding gains and losses on investments | $10,000.00 | |||
The following selected transactions relate to investment activities of Ornamental Insulation Corporation during 2021. The company...
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. Mar. 31 Acquired 8% Distribution Transformers Corporation bonds costing $400,000 at face value. Sep....
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. Sep. Mar. 31 Acquired 8% Distribution Transformers Corporation bonds costing $490,000 at face value. Sep. 1 Acquired $1,170,000 of American Instruments' 10% bonds at face value. 30 Received...
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. Mar. 31 Acquired 8% Distribution Transformers Corporation bonds costing $570,000 at face value. Sep....
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. Mar. 31 Acquired 5% Distribution Transformers Corporation bonds costing $410, 000 at face value....
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. Ornamentals 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 $550,000 at face value. Sep. 1 Acquired $1,350,000 of American Instruments' 10% bonds at face value. Sep. 30 Received...
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 $410,000 at face value. Sep. 1 Acquired $930,000 of American Instruments' 10% bonds at face value. Sep. 30 Received...
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 $550,000 at face value. Sep. 1 Acquired $1,350,000 of American Instruments' 10% bonds at face value. Sep. 30 Received...
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. Mar. 31 Acquired 5% Distribution Transformers Corporation bonds costing $600,000 at face value. Sep....
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. Mar. 31 Acquired 7% Distribution Transformers Corporation bonds costing $590,000 at face value. Sep....
he 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 $600,000 at face value. Sep. 1 Acquired $1,500,000 of American Instruments' 10% bonds at face value. Sep. 30 Received...