Perry Investments bought 2,000 shares of Able, Inc. common stock on January 1, 2017, for $20,000 and 2,000 shares of Baker, Inc. common stock on July 1, 2017 for $24,000. Baker paid $2,400 of previously declared dividends to Perry on December 31, 2017. At the end of 2017, the fair value of the Able stock was $18,000 and the fair value of the Baker stock was $28,000. The stocks were purchased for short-term speculation prior to the effective date of the change in accounting rules for equity investments. Perry owns 10% of each company. Perry should record the receipt of the Baker dividend as
A.
| DR Cash | 240 | ? |
| CR Investment in Baker | ? | 240 |
B.
| DR Cash | 240 | ? |
| CR Dividend income | ? | 240 |
C.
| DR Dividends receivable | 240 | ? |
| CR Dividend income | ? | 240 |
D.
| DR Cash | 240 | ? |
| CR Dividends receivable | ? | 240 |
Answer: D
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