An investor receives a cash dividend from an investment with 3% ownership and insignificant influence.Which journal entry is required?

Question

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When an investor receives a cash dividend, the appropriate journal entry is a debit to Cash and a credit to Dividend Revenue. This transaction recognizes the receipt of cash and the revenue generated from the investment. This is the most appropriate choice because the investor has insignificant influence and therefore should not use the equity-method of accounting. Additionally, interest revenue is not applicable as dividends are not typically considered interest income. Finally, interest receivable is not applicable as the investor has already received the cash dividend.

An Investor Receives a Cash Dividend from an Investment with 3