True/False Indicate whether the statement is true or false. 1. Cash flows from investing activities, as part of the statement of cash flows, include receipts from the sale of land. 2. Factors which reflect the ability of a business to pay its debts and earn a reasonable amount of income are referred to as solvency and profitability. 3. Bondholders are creditors of the issuing corporation. 4. When a corporation issues bonds, it executes a contract with the bondholders, known as a bond debenture. 5. If the bonds are purchased between interest dates, the purchase price includes accrued interest since the last interest payment 6. Investments in bonds that management intends to hold to maturity are called held-to-maturity securities. 7. The statement of cash flows is an optional financial statement. 8. A 15% change in sales will result in a 15% change in net income. Multiple Choice Identify the choice that best completes the statement or answers the question. _ I. The present value of $30,000 to be received in two years, at 12% compounded annually, is (rounded to nearest dollar) a $23,916 b. $37,632 c. $23,700 d. $30,000 2. The journal entry a company records for the issuance of bonds when the contract rate is greater than the market rate would be a. debit Bonds Payable, credit Cash b. debit Cash and Discount on Bonds Payable, credit Bonds Payable c. debit Cash, credit Premium on Bonds Payable and Bonds Payable d. debit Cash, credit Bonds Payable