Answer True or False 1. If you have holdings between 20% and 50% of a company's stock, you have controlling interest of the company. 2. Investments that must be readily marketable and expected to be sold within the next year or operating cycle, whichever is longer are short-term debt investments. 3. One of the primary reasons corporations invest in debt and equity securities is they have excess cash. 4. You initially recorded debt investment at cost. 5. Consolidated financial statements are useful to determine the full extent of total obligations of companies under common control. 6. Carlos Company sells debt investments costing $42,000 for $56,000; in joumalizing the sale, credits are for Stock Investments and Gain on Sale of Debt Investments. 7. When the investor owns between 20% and 50% of the investee's common stock and has significant influence over an investee, the equity method of accounting for long-term investments in stock should be used. 8. Fair value is amount for which a security could be sold in a normal market. 9. Stock investments are investments in the capital stock of other corporations. 10. The entity whose stock the parent company owns is called the subsidiary company