Refer to the facts set out in P7-13 above and consider the following additional information:
a. On July 1, 2018, ICI received a $43,750 interest payment on the Zoe Corp. bonds. The next interest payment is due on January 1, 2019.
b. On September 30, 2018, ICI received a $3,750 dividend on the Bleay Inc. cumulative preferred shares.
c. On December 31, 2018, ICI received a $2,000 dividend on the Norman Inc. ordinary shares.
d. The market value of the Norman Inc. ordinary shares as at December 31, 2018, was $4.90 per share.
e. The market value of the Bleay Inc.’s cumulative preferred shares as at December 31, 2018, was $26.25 per share.
f. The market value of the investment in the Zoe Corp. bonds as at December 31, 2018, was $2,500,000.
ICI has a December 31 year-end. It does not prepare interim financial statements.

Data from P7-13

On January 1, 2018, Investor’s Club Inc. (ICI) made a number of non-strategic investments detailed below:

• The company acquired 100,000 ordinary shares in Norman Inc. for $5 cash per share plus a $10,000 transaction fee. ICI’s management did not make any specific election with respect to the classification of this investment.
• ICI purchased 5,000, $25, 3.0% cumulative preferred shares in Bleay Inc. for $130,000 including transaction costs of $5,000. ICI irrevocably elected to present changes in fair value through OCI.
• ICI paid $2,393,859 plus a $50,000 transaction fee for $2.5 million of 3.5% semi-annual bonds issued by Zoe Corp. that mature in five years. The effective rate of interest earned is 2.0% PER PERIOD. The objective of the company’s business model for this type of asset is to hold the investment for the purpose of collecting the contractual cash flows.

Required:
Prepare the necessary journal entries to record income earned on these assets in 2018 and the requisite fair value adjustments at December 31, 2018.