11) The interest rate that determines the amount of cash interest the borrower pays each year to the bondholder is the A) stated interest rate B) effective interest rate 18) Short-term equity investments with no significant influence are reported at A) cost as long-term assets on the balance sheet C) market interest rate D) explicit interest rate B) market value as either current assets or long-term investments on the balance sheet C) market value as current assets on the balance sheet 12) Another name for the principal amount of a bond is A) market value B) equivalent value C) maturity value D) effective value D) lower of cost or market as current assets on the balance sheet 19) The entry to record a stock dividend received on a short-term investment involves: A) a debit to Cash B) a credit to Dividend Revenue 13) The entry to record the issuance of bonds at par value includes a: A) debit to Discount on Bonds Payable B) credit to Premium on Bonds Payable C) debit to Cash for the par value of the bonds D) debit to Bonds Payable for the par value of the bonds C) a debit to the Marketable Securities account D) no adjusting entry 20) LTI Corp. purchased 100 shares as a short-term investment (no significant influence) for $1,650 on January 4, 2014. The market value of these shares at December 31, 2014 was $2,340. On December 31 2014, the company received a cash dividend of S0.45 per share. The entry to record the dividend should include a: 14) A $1,000 bond quoted at 97.75 is selling for A) $970.75 B) $907.75 C) $977.50 A) credit to Gain on Sale of Investment for $690 B) debit to Dividend Revenue for $45 C) credit to Investment Revenue for $735 D) credit to Dividend Revenue of $45 D) $973.40 15) Jones Corporation issues $400,000, 10%, five-year bonds at face value. The total interest expense over the life of the bonds is: A) $40,000 B) $400,000 C) $200,000 D) $8,000 16) Given a contract interest rate of 8.5 %, and a market interest rate of 7.75 %, the bonds will be issued at: A) par B) a premium C) a discount D) a premium or a discount, depending on the date 17) When discussing share investments, an investee is defined as: A) the one who owns shares in a company B) the shareholder attempting to sell a share C) the broker who handles a particular share transaction D) the company that issued the shares