Lessington Corporation purchases Gonzalez Company bonds for $150,000 as a long-term investment.The investment is classified as available-for-sale securities.Lessington's entry to record the purchase transaction would include a:
A)Debit to Debt Investments-AFS for $150,000.
B)Credit to Debt Investments-AFS for $150,000.
C)Credit Gain on Long-Term Investment $146,000.
D)Debit to Debt Investments-HTM for $150,000.
E)Credit to Debt Investments-HTM for $150,000.

Question

Quizplus · Accepted Answer

When Lessington Corporation purchases Gonzalez Company bonds as an available-for-sale security, the entry to record the purchase transaction should debit the account Debt Investments-AFS (available-for-sale) for the cost of the investment, in this case, $150,000.

Lessington Corporation Purchases Gonzalez Company Bonds for $150,000 as a Long-Term