On January 4,2008,Larsen Company Purchased 5,000 Shares of Warner Company

Multiple Choice

On January 4,2008,Larsen Company purchased 5,000 shares of Warner Company for $59,500 plus a broker's fee of $1,000.Warner Company has a total of 25,000 shares of common stock outstanding and it is presumed the Larsen Company will have a significant influence over Warner.During each of the next two years,Warner declared and paid cash dividends of $0.85 per share.Its net income was $72,000 and $67,000 for 2008 and 2009,respectively.The January 12,2010 entry to record the sale of 3,000 shares of Warner Company stock for $39,000 cash should be:

A)
$$\begin{array} { | c | l | l | } \hline \text { Cash } \ldots \ldots \ldots \ldots \ldots \ldots \ldots \ldots \ldots \ldots \ldots \ldots & 39,000 & \\\hline \text { Loss on Sale of Investments } \ldots \ldots \ldots \ldots \ldots & 2,400 & \\\hline \text { Long-Term Investments } \ldots \ldots \ldots \ldots \ldots & & 41,400 \\\hline\end{array}$$
B)
$\begin{array}{|l|c|c|}\hline \text { Cash. } & 39,000 & \\\hline \text { Loss on Sale of Investments. } & 8,800 & \\\hline \text { Long-Term Investments. } & & 47,880 \\\hline\end{array}$

C)
$\begin{array}{|c|c|c|}\hline \text { Cash.................................................. } & 39,000 & \\\hline \text { Loss on Sale of Investments.................. } & 60 & \\\hline \text { Long-Term Investments.................. } & & 38,940 \\\hline\end{array}$

D)
$\begin{array}{|r|c|c|}\hline \text { Cash............................................... } & 39,000 & \\\hline \text { Gain on Sale of Investments.... } & & 8,750 \\\hline \text { Long-Term Investments..... } &&30,250\\\hline\end{array}$

E)
$\begin{array}{|l|c|c|}\hline \text { Cash. } & 39,000 & \\\hline \text { Loss on Sale of Investments. } & 21,500 & \\\hline \text { Long-Term Investments. } & & 60,500 \\\hline\end{array}$