Question: On January 1 , 2 0 2 4 , James Inc. acquired 4 0 % of the outstanding common stock of Lisa Co . for

On January 1,2024, James Inc. acquired 40% of the outstanding common stock of Lisa Co. for $2,400,000. This investment gave James Inc. the ability to exercise significant influence over Lisa. Lisas assets on that date were recorded at $8,000,000 with liabilities of $2,000,000. There were no other differences between the book and fair values.
In 2024, Lisa reported a net income of $500,000 and paid dividends of $300,000. The fair value of Lisa Co. at December 31,2024 is $7,000,000. James Inc. elects the fair value option for its investment in Lisa.
How are dividends received from Lisa Co. reflected in James Inc.s accounting records for 2024?

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