Blueberry Jam Company owns 37% of Georgia Peach Company. Net income for Georgia Peach Company for the year is $317,000. The journal entry prepared by Blueberry Jam Company includes a:

Question

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Blueberry Jam Company owns 37% of Georgia Peach Company, which means it has significant influence and should use the equity method. The share of net income is 37% of $317,000, which is $117,290. Under the equity method, the investor records its share of the investee's net income as an increase in the investment account, hence a debit to Long-Term Investments for $117,290.

Blueberry Jam Company Owns 37% of Georgia Peach Company