On August 1, Masters Company Buys 2,000 Shares of ABD

On August 1, Masters Company buys 2,000 shares of ABD common stock for $72,500 cash. On December 1, the stock investments are sold for $75,000 in cash. Which of the following are the correct journal entries to record for the purchase and sale of the common stock? a. $\begin{array}{lll} \text { Aug. 1 } & \text { Cash } &72,500\\& \text { Stock Investments } &&72,500\\ \text { Dec. 1 } & \text { Cash } &75,000\\& \text { Stock Investments }&&72,500 \\& \text {Gain on Sale of Stock Investments } &&2,500\\\end{array}$


b. $\begin{array}{lll} \text { Aug. 1 } & \text { Stock Investments } &72,500\\& \text { Cash } &&72,500\\ \text { Dec. 1 } & \text { Cash } &75,000\\& \text { Stock Investments.} &&72,500\\&\text { Gain on Sale of Stock Investments }&&2,500\end{array}$


c. $\begin{array}{lll} \text { Aug. 1 } &\text { Stock Investments } &72,500\\& \text { Cash } &&72,500\\ \text { Dec. 1 } & \text {Stock Investments } &75,000\\& \text {Cash } &&72,500\\& \text {Gain on Sale of Stock Investments}&&2,500\end{array}$
d. $\begin{array}{lll} \text { Aug. 1 } &\text { Cash } &72,500\\& \text { Stock Investments} &&72,500\\ \text {Dec. 1 } & \text { Stock Investments } &75,000\\& \text {Cash } &&72,500\\& \text {Gain on Sale of Stock Investments}&&2,500\end{array}$