Mount Rainier Company owns 100% of the 60,000 outstanding shares of Mount Washington Company. Mount Rainier accounts for the investment in Mount Washington using the equity method, and it has current balance of $750,000 in the Investment in Mount Washington account. Mount Washington issues 20,000 new shares to the public for $25 per share. How does this transaction affect the Investment in Mount Washington account that appears on Mount Rainier financial records?

a. increase to 1,250,000

b. increase to 937,500

c. decrease to 250,000

d. decrease to 500,000

e. no change