Jarvis Corporation makes an investment in 100 shares of Saxton Company's common stock. The stock is purchased for $45 a share plus brokerage fees of $280. The entry for the purchase is ?
A) Cash 4,500
Investments-Saxton Company Stock 4,500

B) Investments-Saxton Company Stock 4,780
Cash 4,780

C) Investments-Saxton Company Stock 4,500
Brokerage Fee Expense 280
Cash 4,780

D) Investments-Saxton Company Stock 4,500
Cash 4,500

Question

Jarvis Corporation makes an investment in 100 shares of Saxton Company's common stock. The stock is purchased for $45 a share plus brokerage fees of $280. The entry for the purchase is ?
A) Cash 4,500
Investments-Saxton Company Stock 4,500
 
B) Investments-Saxton Company Stock 4,780
Cash 4,780
 
C) Investments-Saxton Company Stock 4,500
Brokerage Fee Expense 280
Cash 4,780
 
D) Investments-Saxton Company Stock 4,500
Cash 4,500

Quizplus · Accepted Answer

The correct entry includes both the cost of the shares ($45 x 100 = $4,500) and the brokerage fees ($280), totaling $4,780. This total amount is recorded both as a debit to the investment account and as a credit to cash, reflecting the total cash outflow for the investment purchase.

Jarvis Corporation Makes an Investment in 100 Shares of Saxton