True or False

For equity investments with no significant influence, the unrealized holding gain or loss is reported as a component of stockholders' equity.

True or False

The unrealized holding gains and losses on available-for-sale debt investments are recorded as an adjustment to the Unrealized Holding

GainAvailable-for-Sale account or Unrealized Holding LossAvailable-for-Sale account.

Autumn Services, Inc. acquired 114,000 shares of Spring Metals, Inc. on January 1, 2018. Spring declares a cash dividend of

$ 0.75 per share on February 15, 2019 and pays the cash dividend on March 2, 2019. With the current investment, Autumn Services, Inc. holds

12% of Spring's voting stock. Which of the following will be the correct journal entry for the day when the dividend payment is made (March 2, 2019)?

A.

Cash	85,500
Retained Earnings		85,500

B.

Cash	85,500
Equity Investments		85,500

C.

Cash	85,500
Dividend Receivable		85,500

D.

No Entry

Greene Corporation pays $500,000 to acquire 40% of the voting stock of Universal Technologies, Inc. on May 5, 2019. This investment will be classified as a(n) ________.

A.

significant influence equity investment

B.

held-to-maturity equity investment

C.

trading equity investment

D.

available-for-sale equity investment

The Gain on Disposal of Equity Investment is a(n) ________.

A.

unrealized gain

B.

contra revenue

C.

temporary equity account

D.

element of other comprehensive income

Controlling interest equity investments are debt securities in which the investor owns more than 50% of the investee's voting stock.

True

False

Long-term investments include debt and equity securities that the investor expects to hold longer than one year or debt or equity securities that are not readily marketable.

True

False

Regarding accounting entries for debt securities, which of the following is true?

A.

Debt securities disposed of at maturity are recorded with a debit to the Short-term or Long-term Investments account and a credit to Cash.

B.

Investments in debt securities are recorded at cost, including any brokerage fees paid.

C.

The receipt of interest revenue is recorded with a debit to Cash and a credit to Held-to-Maturity Debt Investments.

D.

The receipt of interest revenue is recorded with a debit to Interest Revenue and a credit to Cash.