This Question: 1 pt 1 of 21 (0 complete) This Quiz: 25 pts possib Purdue Company

Question

This Question: 1 pt 1 of 21 (0 complete) This Quiz: 25 pts possib Purdue Company had the following transactions pertaining to stock investments a February 1 Purchased 2.500 shares ou son Company 10% ownership) at te market price of S15 per share. Purdue Company intends to keep the stock for more than one year and classifies the stock as available-for-sale. b. June 1: Received cash dividends of $6,000 on Hudson Company stock Sold 2,500 shares of Hudson stock for $40,000 The journal entry to record the purchase of the Hudson stock is: O A. debit Equity-Method Investment for S37,500 and credit Cash for $37,500 O B. debit Investment in Available-for-Sale Securities for $37,500 and credit Cash for $37,500. O C. debit Cash for $37,500 and credit Common Stock for $37,500 O D. debit Common Stock for $37,500 and credit Cash for $37,500.

Explanation / Answer

Journal entry :

so answer is b) Debit investment in available for sale securities for $37500 and credit cash for $37500

Date accounts & explanation debit credit Investment in available for sale securities 37500 Cash 37500 (To record purchase of the hudson stock)

Related Questions

Navigate

• Browse (All)
• Browse T
• Subjects

---

---

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.