Asked by Maame Ocran on Jul 12, 2024
Verified
Roxy Corporation makes a short-term investment in 180 shares of Sager Company's common stock. The stock is purchased for $53 a share. The entry for the purchase is a.
Debt Investments 9,540 Cash 9,540\begin{array}{llr} \text { Debt Investments } &9,540\\ \text { Cash } &&9,540\\\end{array} Debt Investments Cash 9,5409,540
b.
Stock Investments 9,540 Cash 9,540\begin{array}{llr} \text { Stock Investments } &9,540\\ \text { Cash } &&9,540\\\end{array} Stock Investments Cash 9,5409,540
c.
Stock Investments 9,047 Cash 9,047\begin{array}{llr} \text { Stock Investments } &9,047\\ \text { Cash } &&9,047\\\end{array} Stock Investments Cash 9,0479,047
d.
Stock Investments 9,000 Cash9,000\begin{array}{llr} \text { Stock Investments } &9,000\\ \text { Cash} &&9,000\\\end{array} Stock Investments Cash9,0009,000
Short-Term Investment
An investment expected to be converted into cash, sold, or exchanged within a short time frame, typically within a year.
Stock Investments
Financial assets consisting of shares in companies, representing ownership and possibly entitling the shareholder to dividends.
Debt Investments
Financial assets involving the loan of money by an investor to a borrower, typically with the expectation of receiving interest income in addition to principle repayment.
- Identify the differences in accounting treatments for short-term versus long-term investment strategies.
- Ascertain the influence of stock operations (purchasing, offloading, and dividend collection) on a financier's accounting records.
Verified Answer
Learning Objectives
- Identify the differences in accounting treatments for short-term versus long-term investment strategies.
- Ascertain the influence of stock operations (purchasing, offloading, and dividend collection) on a financier's accounting records.
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