On January 1, 2015, the Regal Company Purchased 30% of the Outstanding

On January 1, 2015, the Regal Company purchased 30% of the outstanding voting stock of the Air Corporation for $300,000; the book value of Air's net assets at the date of purchase was $900,000. Regal was willing to pay more than the book value of the acquired shares because Air's depreciable assets with a ten-year remaining life were undervalued. Regal uses straight-line depreciation. During 2015, Air reported net income of $75,000 and paid dividends of $30,000.
-Regal has elected the fair value option to account for equity method investments.The fair value of the Air investment as of December 31,2015 was $295,000.The income reported by Regal during 2015 pertaining to the Air investment was

A) $9,000.
B) $22,500.
C) $19,500.
D) $4,000.