Use this information to answer the following question. Select the correct answer

Question

Use this information to answer the following question. Select the correct answer.

These facts concern the long-term stock investments of DeBord Corporation:

The entry to record the purchase of the Vanhook Corporation common stock is:

June 1, 2014 Paid cash for the following long-term investments: 5,000 shares Vanhook Corporation common stock (representing 5 percent of outstanding stock) at $40 per share; 3,000 shares Shust Corporation common stock (representing 3 percent of outstanding stock) at $24 per share. Dec. 31, 2014 Quoted market prices at year end: Vanhook common stock, $35; Shust common stock, $27. April 1, 2015 A change in policy required the sale of 1,000 shares of Vanhook Corporation common stock at $38. July 1, 2015 Received a cash dividend from Shust Corporation equal to $.30 per share. Dec. 31, 2015 Quoted market prices at year end: Vanhook common stock, $39; Shust common stock, $22.

Explanation / Answer

b. Long-Term Investments           200,000
              Cash                                                 200,000

the shares are to be valued at the purchase price

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