Question 1 (1 point) On January 1, 2021, Kaye Ltd. purchased $250,000 of Danford Co.'s 4%, 8-year bonds. The market rate was 5%, and Kaye purchased the bonds for $233,681. The bonds pay interest semi- annually, on June 30 and December 31. Kaye uses the amortized cost model and the effective- interest method to recognize interest income on bond investments. Rounding values to the nearest dollar (if necessary), the entry to recognize receipt of the December 31, 2021 interest payment will include: CR Interest income $5,842 DR Cash $5,863 DR Cash $5,842 CR Interest income $5,863 Question 2 (1 point) Summer Co. uses the cost model to account for its property, plant and equipment (PPE). The PPE was acquired on January 1, 2020 for $575,000. Summer uses straight-line depreciation and estimates that the PPE will have a 14-year life with a residual value of $15,000. Assuming there are no impairment losses, the December 31, 2021 net book value of the PPE will be: $520,000 $535,000 $480,000 $495,000