1) Bonds Payable has a balance of $800,000 and Discount on Bonds Payable has a debit balance of $9,500. If the issuing corporation redeems the bonds at 102, what is the amount of gain or loss on redemption?

a) $6,500 gain

b) $6,500 loss

c) $25,500 gain

d) $25,500 loss

2) Bonds with a face value of $100,000 were purchased through a broker at 100 plus accrued interest of $1,200 and brokerage commission of $120. The amount to be debited to the investment account is:

a) $100,000

b) $100,120

c) $101,320

d) $99,800

3) Brooks Corporation owns 40% of the common stock of the Fairmont Corp. as a long-term investment Company and exercises a significant influence over its operating and financing policies. The stock was purchased on January 1, of the current year, for a total cost of $150,000. At end of the current calendar, Fairmont reports net income of $60,000 and pays $50,000 in dividends to its common stockholders. As a result of these transactions, whats the ending balance in the Investment in Fairmont Corp. Common Stock account at December 31, of the current year on Brooks books?

a) $150,000

b) $174,000

c) $154,000

d) $194,000