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Problem: Vague Corporation purchased 45 percent of the 400,000 shares of the voting stock of the Stacey Materials Corporation at $12 per share. When the investee reported earnings of $600,000, which journal entry will be recorded by the investor? a. Investments in Associated Companies, debit, $270,000; Equity in Investee Earnings, credit, $270,000. b. Investments in Associated Companies, debit, $270,000; Cash, credit, $270,000. c. Cash, debit, $270,000; Investments in Associated Companies, credit, $270,000. d. Equity in Investee Earnings, debit, $270,000; Investments in Associated Companies, credit, $270,000.

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Vague Corporation purchased 45 percent of the 400,000 shares of the voting stock of the Stacey Materials Corporation at $12 per share. When the investee reported earnings of $600,000, which journal entry will be recorded by the investor?

a. Investments in Associated Companies, debit, $270,000; Equity in Investee Earnings, credit, $270,000.

b. Investments in Associated Companies, debit, $270,000; Cash, credit, $270,000.

c. Cash, debit, $270,000; Investments in Associated Companies, credit, $270,000.

d. Equity in Investee Earnings, debit, $270,000; Investments in Associated Companies, credit, $270,000.

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