Eaton company issued $5 million of bonds with a 10% coupon rate of interest. when eaton issued the bonds, the market rate of interest was 11%. which of the following statements is correct?

a. the bonds were issued at a premium.
b. annual interest expense will exceed the company's actual cash payments for interest.
c. annual interest expense will be $500,000.
d. the book value of the bond will decrease as the bond matures.

Evan company reports net income of $232,000 each year and declares an annual cash dividend of $100,000. the company holds net assets of $2,130,000 on january 1, 2017. on that date, shalina purchases 40 percent of evan's outstanding common stock for $1,066,000, which gives it the ability to significantly influence evan. at the purchase date, the excess of shalina’s cost over its proportionate share of evan’s book value was assigned to goodwill. on december 31, 2019, what is the investment in evan company balance (equity method) in shalina’s financial records?