Master purchased 60,000 Kotram Corp common shares.This represents 40% of the outstanding shares.The purchase price was $142,000.The entry to record the transaction includes a

Question

Quizplus · Accepted Answer

The entry to record the purchase of 60,000 Kotram Corp common shares would be a debit to Investment in Kotram Common Shares for the purchase price of $142,000. This represents the cost of the investment and is the amount paid by the company to acquire the shares. There is no need to adjust the amount for the percentage of outstanding shares owned or any other factors. Therefore, the correct answer is B.

Master Purchased 60,000 Kotram Corp Common Shares