Cash 42000
Long-term investments 42000

If the investment was originally purchases for 30000, does that matter? Should there be a separate je to account for that?

Yes, because we got profit here.. so the entry would be..

Cash A/c - Dr 42000
To Profit on sale of investment 12000
To Long Term Investment A/c 30000

Yes, because we got profit here.. so the entry would be..

Cash A/c - Dr 42000
To Profit on sale of investment 12000
To Long Term Investment A/c 30000

A basic rule to pay attention to: you have to take something out at the same amount it went in for. If you purchased it at 30,000, it's in the account at 30,000. If you took 42,000 out, you'd end up with a negative balance. You can't take something out that isn't there.