1)Held-to-maturity securities are:
a.Always classified as Long-Term Liabilities.
b.Equity securities that have a maturity value greater than cost.
c.Always classified as Long-Term Investments.
d.Equity securities that a company intends and is able to hold to maturity.
e.Debt securities that a company intends and is able to hold to maturity.
2)Everrine Corporation owns 3,000 shares of JRW Corporation. JRW Corporation has 25,000 shares of stock outstanding. JRW paid $4 per share in cash dividends to its stockholders. The entry to record the receipt of these dividends is:
a.Debit Cash, $12,000; credit Long-Term Investments, $12,000.
b.Debit Cash, $12,000; credit Unrealized Gain-Equity, $12,000.
c.Debt Long-Term Investment, $12,000; credit Cash, $12,000.
d.Debit Cash, $12,000; credit Dividend Revenue, $12,000.
e.Debit Unrealized Gain-Equity, $12,000; credit Cash, $12,000.
3)Morgan Company purchased 2,000 shares of Asta's common stock for $143,000 as a long-term investment. The investment is classified as available-for-sale securities. The par value of the stock was $1 per share. Morgan paid $375 in commissions on the transaction. The entry to record the transaction would include a:
a.Credit to Common Stock for $143,000.
b.Debit to Long-Term Investments-AFS for $143,375.
c.Debit to Long-Term Investments-AFS for $143,000.
d.Credit to Common Stock for $143,375.
e.Credit to Common Stock for $2,000.
4)Seamark buys $390,000 of Eider's 10% four-year bonds payable at par value on September 1. Interest payments are made semiannually on March 1 and September 1. The journal entry to accrue interest earned at year-end December 31 is (Do not round your intermediate calculations):
a.Debit Interest Revenue $13,000, credit Interest Receivable $13,000.
b.Debit Interest Receivable $13,000, credit Interest Revenue $13,000.
c.Debit Cash $13,000, credit Interest Revenue $13,000.
d.Debit Interest Receivable $19,500, credit Interest Revenue $19,500.
e.Debit Cash $19,500, credit Interest Revenue $19,500.