Question

MotorCity, Inc. purchased 52,000 shares of Shaw common stock for $256,000. This represents 40% of the outstanding stock. The entry to record the transaction includes a:

Answer 1

Answer:

Debit to Long-Term Investments for $256,000

Explanation:

In the case when the shares are purchased they are considered for an investment that could generate the profit in near future. So here the long term assets is to be classified as the asset and the same is to be debited

Therefore it should be debited to the long term investment for $256,000

The same is relevant