A corporation that uses the equity method of accounting for its investment in a 40%-owned investee (that earned $20,000 and paid $5,000 in dividends) made the following entries: Investment in investee Investment Income Cash Dividend Revenue $8,000 $8,000 $2,000 $2,000 What effect will these entries have on the investor's statement of financial position? Select one: a. Investment fairly stated, retained earnings overstated b. Investment understated, retained earnings understated c. Investment overstated, retained earnings overstated d. Investment overstated, retained earnings understated e. All accounts will be fairly stated