On February 12, Addison, Inc. purchased 6,000 shares of Lucas Company at $22 per share plus a $240 brokerage fee. On August 22, Lucas paid a $0.42 dividend per share. On November 10, 4,000 shares of Lucas stock were sold for $28 per share less a $160 brokerage fee. The journal entry to record the purchase would include:

Question

Quizplus · Accepted Answer

The journal entry to record the purchase of the Lucas Company stock will include a debit to the Investments account for the total cost, which is calculated as follows: 
6,000 shares x $22 per share = $132,000 
Plus, the brokerage fee of $240 
Therefore, the total cost is $132,240. Therefore, the correct choice is C, a debit to Investments for $132,240.