1. On January 1, 20X5, Grosbeak Industries Ltd. paid $31,590 to acquire $30,000 in bonds that mature in 10 years. The face value of the bonds is $30,000 and the bonds pay interest semi-annually at 7% per annum on June 30 and December 31. What is the effective rate of interest, per period, that Grosbeak is earning on its investment?

a) 3.14%

b) 3.67%

c) 2.88%

d) 6.52%

5. On January 1, 20X6, Percy Co. bought 1,575 shares of Bowler Inc. for $36.50 per share. The company did not elect to classify the investment as fair value through other comprehensive income (FVOCI). During the 20X6 fiscal year, Bowler paid a dividend of $1.40 per share to its shareholders.

On December 31, 20X6, Bowler shares were trading for $38.60 per share.

What is the effect of the investment in shares of Bowler on Percys December 31, 20X6, statement of comprehensive income?

a) $1,103

b) $2,205

c) $3,308

d) $5,513