quizh w-answers - 1 equitysecurities Theyhaveexcesscash...

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1. Which of the following is  not  a primary reason why corporations invest in debt and  equity securities? They wish to gain control of a competitor. They have excess cash. They wish to move into a new line of business. They are required to by law. Score: 1 of 1 2. Debt investments are initially recorded at: Cost Cost plus accrued interest Fair value None of the above Score: 1 of 1 3. Stan Free Company sells debt investments costing $26,000 for $28,000 plus  accrued interest that has been recorded. In journalizing the sale, credits are: Debt Investments and Loss on Sale of Debt Investments. Debt Investments, Gain on Sale of Debt Investments, and Bond Interest  Receivable. Stock Investments and Bond Interest Receivable. The correct answer is not given. Score: 1 of 1 4. Karen Duffy Company receives net proceeds of $42,000 on the sale of stock  investments that cost $39,500. This transaction will result in reporting in the income  statement a: Loss of $2,500 under “Other expenses and losses.” Loss of $2,500 under “Operating expenses.” Gain of $2,500 under “Other revenue and gains.” Gain of $2,500 under “Operating expenses.” Score: 1 of 1
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5. The equity method of accounting for long-term investments in stock should be used  when the investor has significant influence over an investee and owns:
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quizh w-answers - 1 equitysecurities Theyhaveexcesscash...

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