Lie Ltd Acquired 30% of and Significant Influence Over the Operations

Multiple Choice

Lie Ltd acquired 30% of and significant influence over the operations of Land Ltd on 1 July 20X0.During the financial year ended 30 June 20X1, Land Ltd earned a profit of $60 000.Lie Ltd does not control any entities.What is the journal entry to record the share of Land Ltd's profit in the accounts of Lie Ltd for the year ended 30 June 20X1 using the equity method?

A) $\begin{array} { l r c } \text { Accounts } & \text { Debit \$ } & \text { Credit \$ } \\\text { Investment in Land Ltd } & 18000 & \\\text { Share of associate's profit or loss } & & 18000\end{array}$
B) $\begin{array}{llc}\text { Accounts } & \text { Debit \$ } & \text { Credit \$ } \\\text { Bank } & 18000 & \\\text {Investment in Land Ltd } && 18000 & \\\end{array}$

C) $\begin{array} { l r r } \text { Accounts } & \text { Debit \$ } & \text { Credit \$ } \\\text { Bank } & 18000 & \\\text { Revenue from Land Ltd } & & 18000\end{array}$
D) $\begin{array}{llc}\text { Accounts } & \text { Debit \$ } & \text { Credit \$ } \\\text { Investment in Land Ltd} & 18000 & \\\text { Dividend revenue} && 18000 & \\\end{array}$