Please answer multiple choice questions. HIGHLIGHT IN YELLOW the CORRECT answer. For the calculation question, show your work.

The two main types of investments are:

equity instruments and inventory.

cash and property,plant and equipment.

debt instruments and equity instruments.

debt instruments and cash.

There are many different motivations that companies have for investing in debt and equity instruments issued by other companies, including all of the following except:

to earn interest, dividends, or capital appreciation.

to control the operations of another company.

to raise funds for repayment of short-term liabilities.

to obtain a special relationship with a supplier or customer.

How investments are accounted for can depend on:

the type of instrument.

management's intent.

the ability to reliably measure the investment's fair value.

all of the above (all of these factors can impact the accounting for investments).

The three major models of accounting for investments include all of the following except:

cost/amortized cost model.

replacement value model.

fair value through net income model.

fair value through other comprehensive income model.

Show your work below.

On November 1, 2014, Nesbo Co. purchased a 5-year, 8%, bond with a face value of $200,000. The purchase price of $184,556 was consistent with a 10% yield. Interest is payable semiannually on January 1 and July 1. The bonds mature on January 1, 2019. The amortized cost of the bond on the maturity date is

$184,556

$200,000

$190,000

$195,000

Under the fair value through net income (FV-NI) model, holding gains and losses are normally

recognized in other comprehensive income.

recognized in net income.

accumulated in other comprehensive income.

not recognized but are mentioned in the notes to the financial statements