Chase Incorporated sold $$260,000$ of its inventory to Bartlett Company during $2021$ for $$400,000.$ Bartlett sold $$300,000$ of this merchandise in $2021$ with the remainder to be disposed of during $2022.$ Assume Chase owns $35\%$ of Bartlett and accounts for its investment using the equity method.

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What journal entry will be recorded in $2022$ to recognize its share of the intra$-$entity gross profit that was deferred in $2021?$

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$$A$)$Equity in income of Bartlett$$35,000$Investment in Bartlett$$$$35,000$B$)$Investment in Bartlett$$35,000$Equity in income of Bartlett$$$$35,000$C$)$Equity in income of Bartlett$$12,250$Investment in Bartlett$$$$12,250$D$)$Investment in Bartlett$$12,250$Equity in income of Bartlett$$$$12,250$

Multiple Choice

Entry C$.$

Entry B$.$

Entry D$.$

Entry A$.$

No entry is necessary.