Nixon Company purchased 10, 000 shares of Kostas Company as an available-for-sale security at $45 per share.Brokerage fees amounted to $1, 000 and transfer taxes were $750.The investment should be recorded at

Question

Quizplus · Accepted Answer

The investment should be recorded at the purchase price plus any associated costs. The purchase price is 10,000 shares * $45 = $450,000. Adding the brokerage fees of $1,000 and transfer taxes of $750 gives a total of $450,000 + $1,000 + $750 = $451,750.

Nixon Company Purchased 10, 000 Shares of Kostas Company as an Available-For-Sale