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What is the entry to record profit on equity investment

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Problem 1: Ash Company purchases 1,000 common shares in Ville Corporation on January 1, 2020, at $500 per share. The 1,000 common shares represent 25% of Ville's total outstanding common shares. For the year end December 31, 2020, Ville Corporation has a profit of $100,000. What is the entry to record profit on equity investment in Ville Corporation?

Select one:

a. Debit to Investment in Ville Corporation for $25,000, Credit to Revenue from Investment in Ville Corporation for $25,000

b. Debit to Investment in Ville Corporation for $25,000, Credit to Interest Revenue for $25,000

c. Debit to Interest Receivable for $25,000, Credit to Revenue from Investment in Ville Corporation for $25,000

d. Debit to Investment in Ville Corporation for $25,000, Credit to Dividend Revenue for $25,000

Reference no: EM132948981

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