1) If the market rate of interest is 10%, a $13000, 14%, 10-year bond that pays interest annually would sell at an amount:

less than face value.

equal to face value.

greater than face value.

that cannot be determined.

2) A corporation purchases 32000 shares of its own $20 par common stock for $25 per share, recording it at cost. What will be the effect on total stockholders equity?

Decrease by $640000.

Increase by $800000.

Decrease by $800000.

Decrease by $160000.