Hampton's Construction, Inc What Is the Journal Entry to Record the Change in of Accounting

Multiple Choice

Hampton's Construction, Inc. decided to change from the completed-contract method of accounting to the percentage-of-completion method. The following information is available for net income. Ignore income tax effects: Net Income
$\begin{array}{ccc} \underline{\text { Year Ended } }& \underline{\text { Percentage of Completion}}& \underline{\text { Completed Contract }}\\\text { December } 31,2018 & \$ 180,00 & \$ 125,000 \\\text { December } 31,2019 & 200,000 & 149,000 \\\text { December } 31,2020 & 201,000 & 180,000\end{array}$

What is the journal entry to record the change in accounting principle on January 1, 2020?

A) No entry needed.
B) $\begin{array}{llcc} \text {Construction in Progress } &106,000\\ \text { Deferred Tax Liability }&&106,000 \\\end{array}$

C) $$\begin{array} { l l } \text { Retained Earnings } & 127,000 \\\quad \text { Construction in Progress } &&127,000\end{array}$$
D) $\begin{array}{llcc} \text { Construction in Progress} &106,000 \\ \text { Retained Earnings } &&106,000\\\end{array}$