A parent provides marketing services to its subsidiary during 2017. The parent charged the subsidiary $500,000 for the services. The services cost the parent $400,000. The companies use service revenue and service expense, as appropriate, to record this transaction.

The consolidation eliminating entry or entries related to the intercompany services will:

Increase service revenue by $400,000 Reduce service expense by $500,000 Reduce service revenue by $900,000 Reduce service expense by $900,000