Which of the following is true of the accounts affected by the amortization of the differential on the investor's books when the equity method is applied?

Multiple choice question.

An entry is made to an income statement account, but not to a balance sheet account.

Neither a balance sheet account nor an income statement account is affected.

Entries are made to both a balance sheet account and an income statement account.

An entry is made to a balance sheet account but not to an income statement account.