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The following selected transactions relate to investmentactivities of Ornamental Insulation Corporation during 2018. Thecompany buys debt securities, not intending to profit fromshort-term differences in price and not necessarily to hold debtsecurities to maturity, but to have them available for sale whencircumstances warrant. Ornamental’s fiscal year ends on December31. No investments were held by Ornamental on December 31,2017.

Mar.		31		Acquired 8%Distribution Transformers Corporation bonds costing $550,000 atface value.
Sep.		1		Acquired $1,125,000of American Instruments’ 10% bonds at face value.
Sep.		30		Received semiannualinterest payment on the Distribution Transformers bonds.
Oct.		2		Sold theDistribution Transformers bonds for $590,000.
Nov.		1		Purchased$1,550,000 of M&D Corporation 6% bonds costing at facevalue.
Dec.		31		Recorded anynecessary adjusting entry(s) relating to the investments. Themarket prices of the investments are:

AmericanInstruments bonds	$	1,060,000
M&DCorporation bonds	$	1,625,000

(Hint: Interest must be accrued.)

Required:
1. Prepare the appropriate journal entry for eachtransaction or event during 2018, as well as any adjusting entriesnecessary at year end. For any sales, prepare entries to update thefair-value adjustment, record any reclassification adjustment, andrecord the sale.
2. Indicate any amounts that Ornamental Insulationwould report in its 2018 income statement, 2018 statement ofcomprehensive income, and 12/31/2018 balance sheet as a result ofthese investments.