Any help I can get is appreciated. (4) questions
1. which one of the following itmes below would not affect the investor's income for the period?
a. interest received on a temporary investment in bonds
b. dividends received on a long-term investment in stock where the investor owns 10% of the investee's stock
c. dividends received on a long term investment in stock whre the investor ownes 30% of the investee's stock
d. interest received on a long-term investment in bonds
2. A corporation inssues for cash $1,000,000 of 10%, 20-year bonds, interest payable annually, at a time when the market rate of interest is 12%. The straight-line method is adopted for the amortization of bond discount or premium. Which of the followoing statements is true?
1. The amount of the annual interest expense is computed at 10% of the bond carrying amount at the beginning of the year
b. The amount of the annual interest expense gradually decreases over the life of the bonds
c. The amount of unamortized discount decreases from its balance at issuance date to a zero balance at maturity
d. The amount of unamortized premium decreases from its balance at issuance date to a zero balance at maturity.
3. When the market rate of interest was 11%, Waverly Corporation issued $1,000,000, 12%, 8-year bonds that pay interest semiannually. The selling price of this bond issue was
a. $1,052,310
b. $1,154,387
c. $1,000,000
d. $720,495
