25. White Corp. buys $200,000 of Los Pollos Hermanos Company's 8%, 5-year bonds, at par value on September 1. Interest payments are made semiannually. All of the following regarding accounting for these securities are true except:

Select one:

a. The securities will have a maturity value of $200,000

b. The semiannual interest payment amount is $8,000

c. Interest Revenue should be credited when interest is earned

d. The debt securities should be recorded at cost, $200,000

e. The semiannual interest payment amount is $16,000

26. On February 15, Tuco Company buys bonds of Salamanca Corp. for $100,000. The investment is classified as available-for-sale securities. This is the company's first and only investment in available-for-sale securities. On December 31, the bonds had a fair value of $100,500. The entry to record the year-end adjustment is:

Select one:

a. Debit Cash $500; credit Dividend Revenue $500

b. Debit Cash $500; credit Gain on Sale of Investments $500

c. Debit Fair Value AdjustmentAvailable-for-Sale $500; credit Unrealized GainEquity $500

d. Debit Fair Value AdjustmentAvailable-for-Sale $500; credit Realized GainIncome $500

e. Debit Fair Value AdjustmentAvailable-for-Sale $500; credit Interest Revenue $500