Clinton Ltd acquired 20% of and significant influence over the operations of Lee Ltd on 1 July 20X0. At that date, the equity of Lee Ltd comprised retained profits of $800,000 and paid up capital of $3,000,000. During the financial year ended 30 June 20X1, Lee Ltd paid a final dividend of $300,000 out of profits earned in the year ended 30 June 20X1. Clinton Ltd does not control any entities. What is the journal entry to record these dividends for Clinton Ltd for the year ended 30 June 20X1 under equity accounting? Note that the reclassification method/approach is used.
Clinton Ltd acquired 20% of and significant influence over the operations of Lee Ltd on 1 July 20X0. At that date, the equity of Lee Ltd comprised retained profits of $800,000 and paid up capital of $3,000,000. During the financial year ended 30 June 20X1, Lee Ltd paid a final dividend of $300,000 out of profits earned in the year ended 30 June 20X1. Clinton Ltd does not control any entities. What is the
Select one:
A.
Accounts Debit $ Credit $
Bank 300,000
Dividend revenue 300,000
...
B.
Accounts Debit $ Credit $
Bank 60,000
Investment in Lee 60,000
...
C.
Accounts Debit $ Credit $
Bank 60,000
Dividend revenue 60,000
...
D.
Accounts Debit $ Credit $
Bank 300,000
Investment in Lee 300,000
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