Beige Corporation Pays $536,000 to Acquire 40% of the Equity

question 38

Multiple Choice

Beige Corporation pays $536,000 to acquire 40% of the equity securities of Olive Technologies,Inc.on May 5,2017.In the journal entry to record this transaction ________.

• A)Long-term Investments-Trading Investments will be debited for $536,000
• B)Long-term Investments-Olive Technologies,Inc.will be debited for $536,000
• C)Long-term Investments-Available-for-Sale will be debited for $536,000
• D)Long-term Investments-Available-for-Sale will be credited for $536,000

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Definitions:

Nominal Accounts

Accounts that are closed at the end of each accounting period, including revenue, expense, and withdrawal accounts.

Account Groups

Classifications of accounts that share common characteristics, used to organize and summarize financial information in the general ledger.

Cash

Money in the form of bills or coins; an asset that is readily available for transactions.

Dividends

Distribution of a corporation’s earnings to stockholders.