b . contractual interest rate increases , then bond prices will go down . c . market rate of interest decreases , then bond prices will go up . d . contractual interest rate increases , the market rate of interest will decrease . 15 . A company would not acquire treasury stock a . in order to reissue shares to officers . b . as an asset investment . c . in order to increase trading of the company ’ s stock . d . to have additional shares available to use in acquisitions of other companies . 16 . Which of the following is the appropriate general journal entry to record the declaration of cash dividends ? a . Retained Earnings Cash b . Dividends Payable Cash c . Paid-in Capital Dividends Payable d . Retained Earnings Dividends Payable 17 . Allstate , Inc ., has 10,000 shares of 6 %, $ 100 par value , cumulative preferred stock and 100,000 shares of $ 1 par value common stock outstanding at December 31 , 2007 . If the board of directors declares a $ 50,000 dividend , the a . preferred stockholders will receive 1 / 10th of what the common stockholders will receive . b . preferred stockholders will receive the entire $ 50,000 . c . $ 50,000 will be held as restricted retained earnings and paid out at some future date . d . preferred stockholders will receive $ 25,000 and the common stockholders will receive $ 25,000 . 18 . When a change in accounting principle occurs a . prior years ' financial statements should not be changed to reflect the newly adopted principle . b . the new principle should be used in reporting the results of operations of the current year .