CH15 Graded Written Homework Nanu PROBLEM 1 Pillows, Inc. received $35,000 in dividends on its investment in Couch, Corp. during 2013. Scenario A: assume that Pillows, Inc. uses the fair value method to account for its long-term investment in Scenario B: assume that Pillows, Inc. uses the equity method to account for its long-term investment in Couch, Corp. Couch, Corp. For each scenario, first prepare the journal entry to record the receipt of the dividends and then identify the effect that the receipt of dividends will have on the income statement and the balance sheet. If the financial statement isn't affected, write no effect: Scenario A: Fair Value Metho Income Statement Balance Sheet Scenario B: Equity Method Income Statement Balance Sheet