A company paid $37,800 cash to acquire stock investments with insignificant influence (with a par value of $38,325).The correct entry to record the purchase of the investment is:

Question

Quizplus · Accepted Answer

The correct entry to record the purchase of the investment is to debit the Stock Investments account for the amount paid ($37,800) and credit the Cash account for the same amount ($37,800), reflecting the cash outflow to acquire the investment.

A Company Paid $37,800 Cash to Acquire Stock Investments with Insignificant