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During review of the adjusting entries to be recorded on December 31, 20x8, Grand Corporation discovered that it had inappropriately been using the cost method in accounting for its investment in Case Products Corporation. Grand purchased 100 percent ownership of Case Products on January 1, 20x6, for $85,000, at which time Case Products reported retained earnings of $14,000 and capital stock outstanding of $28,000. The differential was attributable to patents with a life of four years. Income and dividends of Case Products were: Net Income Dividends 20X6 20X7 $22,000 30,000 38,000 S 9,000 11,000 11,000 Required: Prepare the correcting entry required on December 31, 20x8, to properly report the investment under the equity method, assuming the books have not been closed. Case Products' dividends were declared in early November and paid in early December each year. (If no entry is required for a transaction event, select "No journal entry required" in the first account field.) View transaction list Journal entry worksheet Record the correcting entry. Note: Enter debits before credits. Date General Journal Debit Credit nvestment in Case Products stock 40,250 ividend income 11,000 ncome from Case Products etained earnings Record entry Clear entry View general journal

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