1. If company A invests in company B and properly uses the equity method to account for the investment, which of the following will required Company A to make a journal entry to record income ?

A. reciving a divided check from company B

B. company recording an annual profit

C. Market price of company B stock going up

D. all of the above will cause company A to record income

2. Company C buys XXX corporation bonds at a discount and accounts for the bond discount and interst payments using straight line method. which of the following statement is correct regarding the journal entry to record each interest check received.

A. the amount of cash debited will be less than the amount of interest income credited

B.the amount of cash debited will be more than the amount of interest income credited

C. the amount of cash debited will be the same than as the amount of interest income credited.

D. the amount of cash received will change for each interest payment