Highland Cutlery Acquired as a Long-Term Investment Some of the Common

Highland Cutlery acquired as a long-term investment some of the common stock of LTS Company on December 31,2X12.During 2X13,LTS Company had net income of $300,000 and declared and paid cash dividends of $90,000.What journal entry would Highland Cutlery make for 2X13 to recognize dividends received from LTS Company,assuming Highland Cutlery acquired 40% of the outstanding stock of LTS Company?

A) $\begin{array} { l l l } \text { Cash } & 36,000 & \\\quad \text { Dividend Revenue } & & 36,000 \\\end{array}$

B) $\begin{array}{lccc}\text { Cash } & 36,000 & \\\quad \text { Investmentin LTS Company } & & 36,000 \\\end{array}$

C) $\begin{array}{lccc}\text { Cash } & 36,000 & \\\quad \text { Realized Gain on Long-term Investments } & & 36,008 \\\end{array}$

D) $\begin{array}{lccc}\text { Cash } & 36,000 & \\\quad \text { Unearned Revenue } & & 36,000 \\\end{array}$

E) $\begin{array}{lccc}\text { Ivestment in LTS Company } & 36,000 & \\\quad \text { Dividend Revenue } & & 36,000\end{array}$