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:

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The entry to record the purchase of common stock includes a debit to Long-Term Investments-Shaw for the cost of the shares purchased, which is $232,000. This represents MotorCity's investment in Shaw. There is no information provided to suggest that the investment should be classified as Available-for-Sale, Held-to-Maturity or Short-Term, therefore options A, D, and E can be eliminated. Option C suggests a credit to Long-Term Investments, which would reduce the investment balance, and does not match the nature of the transaction.