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1.

a. Record the purchase FF&G Corporation bonds for $14 million.

b. Record the purchase 2 million Ferry Intercommunications common shares for $26 million. c. Record the entry to adjust to fair value the investment in FF&G Corporation bonds on the date of sale. d. Record the entry for sale FF&G Corporation bonds for $14.2 million. e. Record the purchase U.S. Treasury bills for $52 million and Treasury bonds for $67 million. f. Record the entry to adjust to fair value the investment in Ferry Intercommunications common shares on the date of sale.

g. Record the entry for the sale of Ferry Intercommunications common shares for $11 million. h. Record the entry to adjust to fair value the investment in U.S. Treasury bills on the date of sale.

i. Record the entry for the sale of U.S. Treasury bills for $54 million.

j. Record the entry to adjust to fair value the investment in U.S. Treasury bonds on the date of sale.

k. Record the entry for the sale of U.S. Treasury bonds for $66 million.

l. Record the entry for cash dividend received of $200,000 from the Ferry Intercommunications common shares.

m. Record the entry to adjust fair value of the investment at year-end.

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3.

a. Record the entry to adjust to fair value the investment in Ferry Intercommunications common shares on the date of sale.

b. Record the sale of the remaining Ferry Intercommunications common shares for $11.2 million.

c. Record the purchase of the Warehouse Designs Corporation bonds for $36 million.

American Surety and Fidelity buys and sells securities expecting to earn profits on short-term differences in price. For the first 11 months of 2021, gains from selling trading securities totaled $5 million, losses from selling trading securities were $10 million, and the company had earned $5 million in interest revenue. The following selected transactions relate to American's investments in trading securities and equity securities during December 2021, and the first week of 2022. The company's fiscal year ends on December 31. No trading securities or equity investments were held by American on December 1, 2021. Assume that the bonds are purchased at face value. 2021 Dec. 12 Purchased FF&G Corporation bonds for $14 million. 13 Purchased 2 million shares of Ferry Intercommunications common stock for $26 million. American does not have significant influence over Ferry's operations or policies. 15 Sold the FF&G Corporation bonds for $14.2 million. 22 Purchased U.S. Treasury bills for $52 million and Treasury bonds for $67 million. 23 Sold half the shares of Ferry Intercommunications common stock for $11 million. 26 Sold the U.S. Treasury bills for $54 million. 27 Sold the Treasury bonds for $66 million. 28 Received cash dividends of $200,000 from the Ferry Intercommunications common stock shares. 31 Recorded any necessary adjusting entry relating to the remaining investment. The market price of the Ferry Intercommunications stock was $11 per share. 2022 Jan. 2 Sold the remaining Ferry Intercommunications common stock shares for $11.2 million. 5 Purchased Warehouse Designs Corporation bonds for $36 million. Required: 1. Prepare the appropriate journal entry for each transaction or event during 2021 including any year-end adjusting entries. 2. Indicate any amounts that American would report in its 2021 balance sheet and income statement as a result of these investments. 3. Prepare the appropriate journal entry for each transaction or event during 2022. ($ in millions) Balance sheet: Current Assets Total $ 0.0 Income statement: Other revenue (expenses): Total interest and dividend revenue $ 0.0 Gain (loss) on investments: 0.0 Total other revenue (expenses)

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