Use this information to answer the following question. These facts concern the long-term stock investments of Alpha Corporation: June 1, 2009 Paid cash for the following long-term investment: 5,000 shares Carey Corporation common stock (representing 5 percent of outstanding stock) at $40 per share; 3,000 shares Burns Corporation common stock (representing 3 percent of outstanding stock) at $24
per share. Dec. 31, 2009 Quoted market prices at year end: Carey common stock, $35; Burns common stock, $27. April 1, 2010 A change in policy required the sale of 1,000 shares of Carey Corporation common stock at $38. July 1, 2010 Received a cash dividend from Burns Corporation equal to $.30 per share. Dec. 31, 2010 Quoted market prices at year end: Carey common stock, $39; Burns common stock, $22. The entry to record the sale of 1,000 shares of Carey Corporation common stock is:
a. Long-Term Investments 38,000
Cash 38,000
b. Long-Term Investments 38,000
Allowance to Adjust Long- Term Investments to Market 38,000
c. Allowance to Adjust Long -Term Investments to Market 38,000
Cash 38,000
d. Cash 38,000
Loss on Sale of Investments 2,000
Long-Term Investments 40,000
D
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