Pravis Corporation owns 30% of Kuster Corporation.Pravis Corporation received $9,000 in cash dividends from Kuster Corporation.The entry to record receipt of these dividends is:
A)Debit Cash,$9,000; credit Equity Method Investments,$9,000.
B)Debt Equity Method Investments,$9,000; credit Cash,$9000.
C)Debit Cash,$9,000; credit Interest Revenue,$9,000.
D)Debit Unrealized Gain-Equity,$9,000; credit Cash,$9,000.
E)Debit Cash,$9,000; credit Dividend Revenue,$9,000.

Question

Quizplus · Accepted Answer

Pravis Corporation owns 30% of Kuster Corporation, so the dividends received are considered as equity method investments. The entry to record the receipt of these dividends is to debit Cash for $9,000 and credit Equity Method Investments for $9,000.

Pravis Corporation Owns 30% of Kuster Corporation