Thivan Ltd B) C) D)No Entry Is Required Until the Dividends Are Paid

Thivan Ltd. is a wholly-owned subsidiary of Bateman Co. Thivan has declared dividends of $100,000.
- Under the equity method, what entry should Bateman record on its books?

A) $$\begin{array} { | c | c | } \hline \text { DR Investment in Thivan } & 100,000 \\\hline \text { CR Dividend income } & 100,000 \\\hline\end{array}$$
B) $$\begin{array} { | l | c | } \hline \text { DR Investment in Thivan } & 100,000 \\\hline \text { CR Equity in earnings of Thivan } & 100,000 \\\hline\end{array}$$
C) $$\begin{array} { | c | c | } \hline \text { DR Dividends receivable } & 100,000 \\\hline \text { CR Investment in Thivan } & 100,000 \\\hline\end{array}$$
D) No entry is required until the dividends are paid.

Correct Answer:

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