Cronie Enterprises Purchased 10,000 Shares of Stock in Vector Corporation

question 79

Multiple Choice

Cronie Enterprises purchased 10,000 shares of stock in Vector Corporation for $15 per share.Cronie's broker arranged for Cronie to pay only $4 cash per share at the date of purchase with the remaining balance to be paid in monthly installments. Cronie should record the investment by:

• A) debiting the investment account for $40,000.
• B) debiting the investment account for $150,000.
• C) debiting the investment account for $100,000,and crediting a contra account for $60,000.
• D) not making an entry until the cost of the securities is paid in full.

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Definitions:

Wrongfully Dissociated

In the context of partnership law, this term refers to a partner being expelled or exiting a partnership in violation of the agreement or governing statutes.

Partnership Interest

The ownership stake or share an individual holds in a partnership, representing their portion of the rights and profits.

Dissociation

The process by which a member's involvement in an entity, such as a partnership or limited liability company, is terminated, either voluntarily or involuntarily.

Right

entails a legal, social, or ethical principle of freedom or entitlement; the reasonable claim of individuals to have something done or to refrain from doing something.