1. Phan Company owns 28% of the common stock of San Company and accounts for the investment using the equity method. Assuming that Phan Company purchased the stock several years ago, the balance in the investment account would be equal to the cost of the a. investment b. investment plus Phan's share of San’s net income earned since the investment was purchased c. investment plus the total amount of dividends Phan has received from San since the investment was purchased d. investment plus Phan’s share of San’s net income earned since the investment was purchased minus the total amount of dividends Phan has received from San since the investment was purchased 2.The Krebhel Company issued $100,000 of 12% bonds on May 1, 2006 at face value. The bonds pay interest semiannually on January 1 and July 1. The bonds are dated January 1, 2006, and mature on January 1, 2010. The total interest expense related to these bonds for the year ended December 31, 2006 is a. $2,000 b. $4,000 c. $8,000 d. 12,000