Unite Ltd provided a loan of $1 000000 to its subsidiary Inspire Ltd. Interest of $100000 was charged during the year ended 30 June 2018. On consolidation, which of the following adjustments is needed at 30 June 2018 in relation to the interest charged?

I. No adjustment needed

II. DrInterest revenue $100 000

CrInterest expense $100 000

III. Dr Interest expense $100 000

Cr Interest revenue $100 000

IV. Dr Retained earnings$100 000

Cr Cash $100 000