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A parent makes an interest-bearing loan to its 90%-owned subsidiary in 2019, which is still outstanding in 2020. The eliminating entries (I) on the consolidation

A parent makes an interest-bearing loan to its 90%-owned subsidiary in 2019, which is still outstanding in 2020. The eliminating entries (I) on the consolidation working paper for 2020, related to this loan,

reduce investment in subsidiary by the amount of 2019s interest revenue.

reduce the subsidiarys beginning retained earnings by the amount of 2019s interest revenue.

reduce investment in subsidiary by the amount of interest owing at the end of 2020.

have no effect on investment in subsidiary or the subsidiarys beginning retained earnings.

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