MotorCity, Inc. purchased 40,000 shares of Shaw common stock for $232,000. This represents 40% of the...
MotorCity, Inc. purchased 40,000 shares of Shaw common stock for $232,000. This represents 40% of the outstanding stock. The entry to record the transaction includes a:
Select one:
a. Debit to Long-Term Investments-HTM for $232,000.
b. Debit to Long-Term Investments for $232,000.
c. Debit to Long-Term Investments for $92,800.
d. Debit to Short-Term Investment-AFS for $232,000.
e. Credit to Long-Term Investments for $92,800.
Homework Answers
Option B is the answer
Debit to long term investments 232,000
Investment here is an asset to Motorcity and its increase results in the debit. And the equity investments generally don't have maturity date, so option A is incorrect.
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