Purdue Company Had the Following Transactions Pertaining to Stock Investments

Multiple Choice

Purdue Company had the following transactions pertaining to stock investments: a. February 1: Purchased 3100 shares of Hudson Company (10% ownership) at the market price of $17 per share. Purdue Company intends to keep the stock for more than one year and classifies the stock as available-for-sale.
B. June 1: Received cash dividends of $7000 on Hudson Company stock.
C. October 1: Sold 3100 shares of Hudson stock for $55,800.
The journal entry to record the purchase of the Hudson stock is:

A) debit Equity-Method Investment for $52,700 and credit Cash for $52,700.
B) debit Investment in Available-for-Sale Securities for $52,700 and credit Cash for $52,700.
C) debit Cash for $52,700 and credit Common Stock for $52,700.
D) debit Common Stock for $52,700 and credit Cash for $52,700.