Question: Band Co. uses the equity method to account for its investment in Guard, Inc. common stock. How should Band record a 2% stock dividend received

Band Co. uses the equity method to account for its investment in Guard, Inc. common stock. How should Band record a 2% stock dividend received from Guard?

a. As dividend revenue at Guard’s carrying value of the stock.

b. As dividend revenue at the market value of the stock.

c. As a reduction in the total cost of Guard stock owned.

d. As a memorandum entry reducing the unit cost of all Guard stock owned.

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