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Royce Company purchased 25% interest in Bell Corporation's common stock on January 10. At year-end, Bell Corporation reported net income of $250,000. Under the equity

Royce Company purchased 25% interest in Bell Corporation's common stock on January 10. At year-end, Bell Corporation reported net income of $250,000. Under the equity method, Royce Company's journal entry to record its share of Bell Corporation's net income would include a __________ to __________.

  1. debit; Investment in Bell Corporation Stock for $62,500
  2. credit; Investment in Bell Corporation Stock for $62,500
  3. debit; Income of Bell Corporation for $250,000
  4. credit; Income of Bell Corporation for $250,000

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