8. If Thunder Bay acquired a 20% interest in Fort William on December 31, 2019 for $45,000, and during 2018 Fort William reported net income of $25,000 and paid a total cash dividend of $10,000, applying the equity method would give a debit balance in the Investment in Fort William Corp. account at the end of 2020 of

a) $37,000.

b) $45,000.

c) $48,000.

d) $50,000.

Use the following information to answer questions 9 and 10

On January 1, 2019, on their issue date, Diogenes Inc. purchased 9%, $200,000, 10-year bonds. Interest is paid annually on December 31. Diogenes uses the amortized cost model and the effective-interest method for amortizing premium or discount. The current market rate was 10% for bonds. On December 31, 2019, the bonds have a market value of $185,000.

9. What is the amount paid for the bond on January 1, 2019

a) $178,711

b) $200,000

c)$187,711

d) $185,000

10. How much interest would be recorded in 2019?

a) $12,289

b) $18,000

c) $20,000

d) $18,771