Lanier Industries Owns 45% of McCoy Company B) C) D)

Lanier industries owns 45% of McCoy Company.For the current year, McCoy reports net income of $250,000 and declares and pays a $60,000 cash dividend.Which of the following correctly presents the journal entries to record Lanier's equity in McCoy's net income and the receipt of dividends from McCoy?

A) $\begin{array} { lll }\text { Dec. 31}&\text { Share Investments}&112,500 \\& \text { Revenue from Investment in McCoy Company}&&112,500 \\ \text {Dec. 31 }&\text {Cash }& 27,000\\& \text {Share Investments }&&27,000 \\\\\end{array}$

B) $\begin{array} { lll }\text { Dec. 31}&\text { Share Investments }&112,500 \\& \text {Revenue from Investment in McCoy Company }&&112,500 \\ \text {Dec. 31 }&\text {Cash }& 60,000\\& \text {Share Investments }&&60,000 \\\\\end{array}$

C) $\begin{array} { lll }\text { Dec. 31 }&\text {Share Investments.}&85,500 \\& \text {Revenue from Investment in McCoy Company }&&85,500 \\\\\end{array}$

D) $\begin{array} { lll }\text { Dec. 31 }&\text {Revenue from Investment in}& \\& \text {McCoy Company }&112,500 \\& \text {Share Investments }& &112,500\\ \text {Dec. 31 }&\text {Share Investments}&27,000 \\ \text {Cash }&&27,000 \\\end{array}$