If Intervale Railway invests $100,000 in 5% bonds at face value that the company intends to hold until the bond maturity date, the interest revenue recognized when each semiannual interest payment is received would be recorded as a A. credit to Interest Revenue, $2,500. B. debit to Held-to-Maturity Debt Investments, $2,500. C. debit to Dividend Revenue, $2,500. D. credit to Cash, $2,500.

Which of the following mechanisms would be most likely to motivate managers to act in the best interests of shareholders? a) decrease the use of restrictive covenants in bond agreements, b) take actions that reduce the possibility of a hostile takeover, c) elect a board of directors that allows managers greater freedom of action, d) increase the proportion of executive compensation that comes from stock options and reduce the proportion that is paid as cash salaries, e) eliminate a requirement that members of the board directors have a substantial investment in the firm's stocks