Thornhill Corporation has excess cash resulting from extremely successful operations. It has decided to invest this cash in debt and equity securities as follows to be held as non-strategic investments:

On December 31, 2014, the fair values of the investments held by Thornhill Corporation were:
Logitech, $0.90; Gildan Activewear, $101.00; and Winston, $14.00. Assume the fair value and carrying value of the Sharp bond was equal.

Required
1. Prepare an amortization schedule for 2014 and 2015 regarding the Sharp Inc. bond.
2. Prepare journal entries to record the investment activity, including the impairment adjustment on December 31, 2014.
3. Show how the investments will be reported on the December 31, 2014, balance sheet.
Analysis Component: If the December 31, 2014, impairment adjustment on the Logitech shares were not recorded by Thornhill Corporation, would the February 6, 2015, journal entry be affected?Explain.

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2014 18 27 26 30 4 Jan. Feb. Apr. Purchased 16,000 common shares of Logitech at $1.40 Purchased 500 common shares of Gildan Activewear at $103.00 Purchased 1,000 common shares of Winston at $18.00 Received a 50.10 per share cash dividend on the Logitech common shares Sold 10,000 Logitech common shares at $1.15 1 Paid $142,933 for a 7.2%, five-year, $140,000 Sharp Inc. bond that pays interest semi-annually beginning December 31. The market rate of interest on this date was 6.7%. Thornhill Corporation plans to hold this investment until maturity Received a S7.25 per share cash dividend on the Gildan Activewear shares Received a $0.10 per share cash dividend on the remaining Logitech shares Received interest on the Sharp Inc. bond June July Sept. Dec. 17 1 31 Feb June eb 201s Keceived S0. 10 6 Sold the remaining Logitech shares at $0.85 30 Received interest on the Sharp Inc. bond