Question
1) Company ABC owns 100% of the outstanding shares of Company XYZ, and accounts for the net income of Company XYZ using the Simple Equity
1) Company ABC owns 100% of the outstanding shares of Company XYZ, and accounts for the net income of Company XYZ using the Simple Equity Method. When Company XYZ reports quarterly Net Income of $100,000 on 3/31/18 to company ABC, Company ABC will make a journal entry to:
A) Debit Investment Income and Credit the Investment $100,000
B) Debit the Investment and Credit Investment Income $100,000
C) Company ABC will make no journal entry resulting from this transaction
D) Debit Dividends Receivable and Credit Investment Income $25,000 as its only for a quarter of the year
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