Investments in Stock
Investments in Stocks
- If purchased outright then cost equals price plus fees.
- If purchased “on-margin”:
- Record at cost and liability to broker.
- Stock subscriptions result in a debit to an investment account and a credit to a payable.
- When stock is exchanged for nonmonetary assets the cash equivalent price of what is given up or received, whichever is clearer, is used to value the investment.