15) At its date of incorporation, Wilson, Inc. issued 100,000 shares of its $ 10 par common stock at $ 11 per share. During the current year, Wilson acquired 20,000 shares of its common stock at a price of $ 16 per share and accounted for them by the cost method. Subsequently, these shares were reissued at a price of $ 12 per share. There have been no other issuances or acquisitions of its own common stock. What effect does the reissuance of the stock have on the following accounts?
Retained Earnings | Additional Paid-in Capital A. Decrease | No effect B. Decrease | Decrease C. No effect | No effect D. No effect | Decrease
16) An unrealized holding gain on a company ‟ s available-for-sale securities should be reflected in the current financial statements as
A. a note or parenthetical disclosure only.
B. an extraordinary item shown as a direct increase to retained earnings.
C. other comprehensive income and included in the equity section of the balance sheet.
D. a current gain resulting from holding securities.
17) Which of the following is correct about the effective-interest method of amortization?
A. Amortization of a premium decreases from period to period.
B. The effective interest method applied to investments in debt securities is different from that applied to bonds payable.