Dinc. owned all of the outstanding stock of B Co. The subsidiary had bonds payable outstanding on January 1, 2020, with a book value of $270,000. The parent acquired the bonds on that date for $291,000. Subsequently, D Inc. reported interest income of $26,000 in 2020 while B Co. reported interest expense of $31,000. Consolidated financial statements were prepared for 2021. What adjustment would be required for the retained earnings balance as of January 1, 2021? Multiple Choice Reduction of $21,000 Reduction of $5,000 Increase of $16.000. Reduction of $21,000. Reduction of $5,000. Increase of $16,000. Reduction of $16,000. Increase of $5.000