Jarvis Corporation makes an investment in 100 shares of Saxton Company's common stock. The stock is purchased for $40 a share plus brokerage fees of $300. The entry for the purchase is:

Question

Quizplus · Accepted Answer

The entry should reflect the total cost of the investment, including the brokerage fees. Therefore, the stock investment account should be debited for $4,300 ($40 x 100 shares + $300 fee) and the cash account should be credited for the same amount.

Jarvis Corporation Makes an Investment in 100 Shares of Saxton