Reference no: EM13579669

1. On May 1, 2014, Stanton Company purchased $60,000 of Harris Company's 12% bonds at 100 plus accrued interest of $2,400. On June 30, 2014, Stanton received its first semiannual interest. On February 1, 2015, Stanton sold $50,000 of the bonds at 103 plus accrued interest.

The journal entry Stanton will record on February 1, 2015, will include:

A. a credit to Interest Revenue for $1,500.

B. a credit to Gain on Sale of Investments for $1,500.

C. a credit to Cash for $52,500.

D. a credit to Interest Receivable for $600.

2.An investor purchased 500 shares of common stock, $25 par, for $19,250. Subsequently, 100 shares were sold for $35 per share. What is the amount of gain or loss on the sale?

A. $3,500 gain

B. $350 gain

C. $350 loss

D. $500 gain

3.Edison Corporation paid a dividend of $10 per share on its $100 par preferred stock and $4 per share on its $20 par common stock. The market value of the common stock is $80 per share. Edison's dividend yield is:

A. 5%

B. 10%

C. 25%

D. 20%

4.On May 1, 2014, Stanton Company purchased $60,000 of Harris Company's 12% bonds at 100 plus accrued interest of $2,400. On June 30, 2014, Stanton received its first semiannual interest. On February 1, 2015, Stanton sold $50,000 of the bonds at 103 plus accrued interest.

The journal entry Stanton will record on June 30, 2014, will include:

A. a credit to Interest Revenue for $2,400.

B. a debit to Cash for $3,600.

C. a credit to Cash for $2,400.

D. a credit to Interest Receivable for $1,200.