Omega Corporation made several purchases which were marketable securities during 2019. At December 31, 2019, the company had investments in bonds listed below. None was held at the last reporting date, December 31, 2018 and all are considered securities available-for-sale.

Short Term Cost Fair Value Unrealized holding gains

Heyway Inc 1920000 1620000

Clarkson 1800000 1920000

Totals 3720000 3540000

Long Term

Pablo Coorporation 1920000 2240000

Jasmine Coorporation 2880000 2640000

Totals 4800000 4880000

Requirement:

1. Prepare the adjusting journal entry to record the balance needed in the Fair Value Adjustment Account. (5 points)
2. What amounts would be reported in the income statement at December 31, 2018 as a result of these adjusting entries? (5 points)