Held-to-maturity investments applies only to debt securities because ________.

A.

equity securities do not mature on a specific date

B.

these are long-term investments

C.

equity securities are held for a short period of time

D.

these securities earn periodic interest

The Frozen Lake Company issues $530,000 of 9%, 10-year bonds at 105 on March 31, 2017. The bond pays interest on March 31 and September 30. Assume that the company uses the straight-line method for amortization. The journal entry to record the first interest payment on September 30, 2017 includes a ________. (Round your intermediate answers to the nearest dollar.)

A.

credit to Premium on Bonds Payable for $1,325

B.

debit to Interest Expense for $22,525

C.

debit to Interest Expense for $25,175

D.

debit to Cash for $23,850

8 A bond is issued at premium ________.

A.

when a bond's stated interest rate is higher than the market interest rate

B.

when a bond's stated interest rate is less than the market interest rate

C.

when a bond's stated interest rate is equal to the market interest rate

D.

when a bond's stated interest rate is less than the effective interest rate