Chapter 14 & 15 pretest (Answer Key) - 23rd

Chapter 14 & 15 pretest (Answer Key) - 23rd - Ch. 14 & 15...

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1. One potential advantage of financing corporations through the use of bonds rather than common stock is c. the interest expense is deductible for tax purposes by the corporation 2. On June 1, $400,000 of bonds were purchased as a long-term investment at 97.5 and $500 was paid as the brokerage commission. If the bonds bear interest at 12%, which is paid semiannually on January 1 and July 1, what is the total cost to be debited to the investment account? b. $390,500 4. Which of the following statements below is not a reason a company may purchase another company's stock? b. buoying up the other company's stock price 5. The cost method of accounting for investments a. requires the investment to be reported at its market value 6. An investor purchased 500 shares of common stock, $25 par, for $21,750. Subsequently, 100 shares were sold for $49.50 per share. What is the amount of gain or loss on the sale? b.
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This note was uploaded on 05/19/2010 for the course ACCT ACCT104 taught by Professor Stjohn during the Spring '10 term at Coastline Community College.

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Chapter 14 & 15 pretest (Answer Key) - 23rd - Ch. 14 & 15...

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