(This problem is a variation of P 12–5, modified to consider equity investments.)
The following selected transactions relate to investment activities of Ornamental Insulation during 2021. The company buys equity securities as noncurrent investments. None of Ornamental’s investments are large enough to exert significant influence on the investee. Ornamental’s fiscal year ends on December 31.
No investments were held by Ornamental on December 31, 2020.

Mar. 31 Acquired Transformers for $400,000.
Sep. 1 Acquired $900,000 of American Instruments’ common stock.
Sep. 30 Received a $16,000 on the Transformers common stock.
Oct. 2 Sold the Transformers for $425,000.
Nov. 1 Purchased $1,400,000 of M&D common stock.
Dec. 31 Recorded any necessary adjusting entry(s) relating to the investments. The market prices of the investments are:
American Instruments ………$ 850,000
M&D ……………$1,460,000

Required:
1. Prepare the appropriate journal entry for each transaction or event during 2021, as well as any adjusting entry 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 as a result of these investments. Include totals for net income, comprehensive income, and retained earnings as a result of these investments.