Tupelo Corporation used the equity method to account for a 25% ownership interest in Jordan Corporation. If Jordan Corporation reports $300,000 of income and pays $60,000 of dividends, the net effect of the entries made by Tupelo Corporation will be to:

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Tupelo Corporation will increase the Investment account by 25% of Jordan Corporation's income ($300,000 * 25% = $75,000) and reduce it by 25% of the dividends paid ($60,000 * 25% = $15,000), resulting in a net increase of $60,000.

Tupelo Corporation Used the Equity Method to Account for a 25