debt 1. APB Opinion No. 21 specifies that, regarding the amortization of a premium or discount on a security, the a. par value method must be used and therefore no allocation is necessary b. effective-interest method of allocation must be used. c. straight-ine method of allocation must be used d. effective-interest method of allocation should be used but other methods can be applied if there is no material difference in the results obtained. 22. An available-for-sale debt security is purchased at a discount. The entry to record the amortization of the discount includes a a. debit to Debt Investments. b. debit to the discount account. c. debit to Interest Revenue d none of these. 23. Under U.S. GAAP, which of the following models may be used to determine if an investment is consolidated? Risk-and-reward model Voting-interest approach a) b) c) d) Yes No No Yes No Yes No Yes . Debt securities acquired by a corporation which are accounted for by recognizing unrealized holding gains or losses and are included as other comprehensive income and as a separate component of stockholders' equity are a. never-sell debt securities b. available-for-sale debt securities c. held-to-maturity debt securities d. trading debt securities racy Co. owns 4,000 of the 10,000 outstanding shares of Penn Corp. common stock. During 2013, Penn arns $360,000 and pays cash dividends of $120,000. Tracy should report investment revenue for 2013 of a. $144,000 b. $96,000. c. $48,000. d. $120,000