Company A purchases 30,000 shares of Company B's 100,000 outstanding shares at \$20 per share. What is the initial investment cost and the journal entry?

• A. Initial investment cost is \$300,000; Debit Investment in Company B \$300,000, Credit Cash \$300,000.
• B. Initial investment cost is \$600,000; Debit Cash \$600,000, Credit Investment in Company B \$600,000.
• C. Initial investment cost is \$600,000; Debit Investment in Company B \$600,000, Credit Cash \$600,000.
• D. Initial investment cost is \$300,000; Debit Cash \$300,000, Credit Investment in Company B \$300,000.

Answer: (C)