On June 17, 2012, Company A purchases 10,000 shares of Company B's $15 par value, common stock for $200,000 . Company B has 50,000 shares of common stock outstanding. On December 31, 2010, the market price of the stock is $22 per share. Company A's entry to record the stock purchase is:
a. debit Short-Term Investments, $200,000, and credit Cash, $200,000.
b. debit Investment in Company B, $200,000, and credit Cash, $200,000.
c. debit Long-Term Investments, $150,000; debit Allowance to Adjust Long-Term Investments to Market, $50,000; and credit Cash, $200,000.
d. debit Investment in Company B, $150,000; debit Allowance to Adjust Long-Term Investments to Market, $50,000; and credit Cash, $200,000.
b
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