Required information Portland Inc. (Portland) owns 80% of Seattle Inc. (Seattle) and uses the cost method to account for its investment. The 2023 income statements of both companies are shown below. Gross profit Miscellaneous revenues (losses) Depreciation expense Income tax expense Net Income Portland Seattle $100,000 $50,000 (30,000) (20,000) (20,000) (15,000) (20,000 (6,000) $30,000 $9,000 On January 1, 2023, Seattle acquired equipment for $7,000 and sold it the same day to Portland for $12,000. The equipment had a remaining useful life of 10 years on that date. Both companies are subject to an effective tax rate of 40%. Assuming Portland uses the equity method to account for the investment in Seattle, which of the following is the correct journal entry to record the realized after-tax profit from the sale of the equipment in 2023? Investment in Snapshot Equity method income. Equity method income Investment in Snapshot Investment in Snapshot Equity method income Debit Credit 500 500 Debit 240 Credit 240 Debit 240 Credit 240 Accumulated depreciation Debit 500 Credit Income tax expense Depreciation expense Deferred income tax 200 500 200