Dividends and acquisition method

Let’s say you acquire 80% of company X. They have Net income of $100, and pay $20 dividends.

You deduct 20% from their net income for non controlling interest. What about the dividends?

You’ll record $16 in dividend income and $16 in cash.

They’ll deduct $20 from cash and $20 from retained earnings.

Non controlling interest to be recorded in equity section of the balance sheet will be reduced by the dividend pertaining to them.