1. On May 1, 2014, Stanton Company purchased $60,000 of Harris Company's 12% bonds at 100 plus accrued interest of $2,400. On June 30, 2014, Stanton received its first semiannual interest. On February 1, 2015, Stanton sold $50,000 of the bonds at 103 plus accrued interest.
The journal entry Stanton will record on February 1, 2015, will include:
A. a credit to Interest Revenue for $1,500.
B. a credit to Gain on Sale of Investments for $1,500.
C. a credit to Cash for $52,500.
D. a credit to Interest Receivable for $600.
2.An investor purchased 500 shares of common stock, $25 par, for $19,250. Subsequently, 100 shares were sold for $35 per share. What is the amount of gain or loss on the sale?
A. $3,500 gain
B. $350 gain
C. $350 loss
D. $500 gain
3.Edison Corporation paid a dividend of $10 per share on its $100 par preferred stock and $4 per share on its $20 par common stock. The market value of the common stock is $80 per share. Edison's dividend yield is:
A. 5%
B. 10%
C. 25%
D. 20%
4.On May 1, 2014, Stanton Company purchased $60,000 of Harris Company's 12% bonds at 100 plus accrued interest of $2,400. On June 30, 2014, Stanton received its first semiannual interest. On February 1, 2015, Stanton sold $50,000 of the bonds at 103 plus accrued interest.
The journal entry Stanton will record on June 30, 2014, will include:
A. a credit to Interest Revenue for $2,400.
B. a debit to Cash for $3,600.
C. a credit to Cash for $2,400.
D. a credit to Interest Receivable for $1,200.