Table 16-1
On January 2, 2017, Logan Corporation purchased 2,000 common shares in Downright Corporation for $55 per share and paid a $500 brokerage commission for the purchase. Logan intends to hold this investment for less than a year and classifies it as a Short-Term Investment. The market value of the shares at December 31, 2017, is $58 per share.
-Refer to Table 16-1.The entry to record the acquisition of these shares includes:

Question

Quizplus · Accepted Answer

The acquisition of the shares would be recorded as follows:
Debit Short-Term Investments: $110,000 ($55 per share x 2,000 shares)
Credit Cash: $109,500 ($110,000 - $500 brokerage commission)

Table 16-1 On January 2, 2017, Logan Corporation Purchased 2,000 Common Shares