1) Piano Corporation has a current ratio of 1:2. Piano pays a cash dividend that was previously declared. How will the journal entry to record the payment affect the Current Ratio and Stockholders' Equity, respectively?

a. Increase, No Effect

b. Decrease, No Effect

c. Increase, Increase

d. No Effect, Decrease

e. No Effect, No Effect

2) Kaselitz Corp. issued a $100,000, 9%, 5-year bond on 1/1/16. Interest is paid each June 30 and December 31. The bond sold for $104,055 to yield 8%. The effective interest method is used. The Unamortized Premium on Bonds Payable at 12/31/16 is:

a. $3,366

b. $3,244

c. $3,717

d. $3,379

e. $3,244