A Parent Company That Uses the Equity Method of Accounting

Multiple Choice

A parent company that uses the equity method of accounting for a 90%-owned subsidiary prepared the following journal entry:
A possible explanation for the foregoing journal entry is:

A) To recognize 90% of subsidiary's net income for year
B) To recognize 90% of subsidiary's net loss for year
C) To amortize differences between current fair values and carrying amounts of subsidiary's identifiable net assets on date of business combination
D) Either a or c
E) Either b or c