Reporting Joint Venture Earnings Under Equity Method

XYZ Corp has recently entered into a joint venture with ABC Ltd to develop a new renewable energy project. Both companies have contributed equally to the initial investments and share profits on a 50/50 basis. During the fiscal year, the joint venture earned a net income of $4 million. XYZ Corp owns 50% of the joint venture and must determine how to report its share of the joint venture's earnings in its consolidated financial statements.

Which of the following correctly describes how XYZ Corp should account for its investment in the joint venture under the equity method?