Question
Moodel Ltd owns all the share capital of Reline Ltd. The following transactions are independent: (a) Reline Ltd gives $50 000 as an interest-free loan
Moodel Ltd owns all the share capital of Reline Ltd. The following transactions are independent:
(a) Reline Ltd gives $50 000 as an interest-free loan to Moodel Ltd on 1 July 2019. Moodel Ltd made a $20 000 repayment by 30 June 2020.
(b) Reline Ltd rented a spare warehouse to Moodel Ltd starting from 1 July 2019 for 1 year. The total charge for the rental was $300, and Moodel Ltd paid half of this amount to Reline Ltd on 1 January 2020 and the rest on 1 July 2020.
REQUIRED: For in the intragroup transactions, prepare adjusting journal entries for the consolidation worksheet at 30 June 2020. Explain in detail why you made each adjusting journal entry.
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Intermediate Accounting
Authors: Donald E. Kieso, Jerry J. Weygandt, And Terry D. Warfield
13th Edition
9780470374948, 470423684, 470374942, 978-0470423684
