Jarvis Corporation makes an investment in 100 shares of Saxton Company's common stock.The stock is purchased for $45 a share plus brokerage fees of $280.The entry for the purchase is

Question

Quizplus · Accepted Answer

The entry for the purchase of 100 shares of Saxton Company's common stock for $45 a share plus brokerage fees of $280 will be as follows:
100 shares of Saxton Company's common stock          $4,500.00
Add: Brokerage fees                                                       $280.00
Total cost                                                                           $4,780.00

Therefore, the correct entry is:
Debit: Investment in Saxton Company's common stock     $4,780.00
Credit: Cash                                                                                     $4,780.00

Option B contains the correct debit and credit accounts, therefore, it is the best choice.

Jarvis Corporation Makes an Investment in 100 Shares of Saxton