Also, assume that the company was founded on January 1 with a contribution by owners of $200,000 in cash credited to capital stocks.

Required

1. Record the journal entry on 1/1 for the $200,000 contribution by owners.
2. Suppose the securities were purchased on Jan 2. Record the journal entry.
3. Record the journal entry for fair value adjustment.
4. Explain why net income and retained earnings are zero (assume no additional transactions)
5. Prepare a statement of comprehensive income.
6. Prepare a complete balance sheet considering all the facts above
 

The following information was extracted from Gil Co.'s December 31 balance sheet: Noncurrent assets: Available-for-sale debt securities (carried at fair value) Equity: Accumulated other comprehensive income (OCI) Unrealized holding gains and losses on available-for-sale debt securities $96,450 (19,800)