Smith, Inc. uses the Simple Equity Method to account for the net income of Redstone, Inc., a company Smith, Inc. owns 100% of the outstanding stock of. When Redstone, Inc. reports quarterly Net Income of $80,000 on 6/30/19, Smith, Inc. will:

Question 9 options:

a)

Debit Dividends Receivable and Credit Investment Income $20,000 as it's only for a quarter of the year

b)

Smith, Inc. will make no journal entry resulting from this transaction

c)

Debit the Investment and Credit Investment Income $80,000

d)

Debit Investment Income and Credit the Investment $80,000