On January 2, 2018, Green Energy Corp

Subject:AccountingPrice:2.84 Bought6

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On January 2, 2018, Green Energy Corp. purchased 40% of the outstanding common shares of EEC Company for $500 million. At the date of purchase, the fair value of EEC net assets was $800 million.The book values and fair values for all balance sheet items of EEC Company were the same on January 2, 2018. EEC Company reported net income of $100 million for the year ended December 31, 2018 and paid a cash dividend of $20 million to all shares outstanding in 2018. Green Energy Corp. received $8 million cash dividend from EEC in 2018.

 

Based on the above information, what is the journal entry to record Green Energy's 2018 investment revenue for its investment in EEC Company using the equity method?

Select one:

a. Cash                                  40,000,000

         Investment Income                        40,000,000

b. Equity Investments             40,000,000

        Investment Income                         40,000,000

c. Investments Receivable        40,000,000

        Investment Income                         40,000,000

d. No entry needed.