ion 24 et ered 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: s out of Investment in investee $8,000 ag tion Investment Income $8,000 Investment in investee $2,000 Cash $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 understated d. Investment overstated, retained earnings correct e. All accounts will be fairly stated