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Question
On February 15, Jewel Company buys 7,000 shares of Marcelo Corp. common stock at $28.53 per share plus a brokerage fee of $400. The stock is classified as long-term available-for-sale securities. This is the company's first and only investment in available-for-sale securities. On March 15, Marcelo declares a dividend of $1.15 per share payable to stockholders of record on April 15. Jewel received the dividend on April 15 and ultimately sells half of the Marcelo stock on November 17 of the current year for $29.30 per share less a brokerage fee of $250. The journal entry to record the purchase on February 15 is:
A) Debit Long-Term Investments-HTM $199,710; credit Cash $199,710.
B) Debit Long-Term Investments-Trading $200,110; credit Cash $200,110.
C) Debit Long-Term Investments-Trading $199,710; credit Cash $199,710.
D) Debit Long-Term Investments-AFS $199,710; credit Cash $199,710.
E) Debit Long-Term Investments-AFS $200,110; credit Cash $200,110.
Answer
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