P Ltd lends $200 000 to its subsidiary S Ltd.At the end of the year,S Ltd has paid interest of $18 000 and owes a further $2000 (assume a tax rate of 30%).The required consolidation entry is:
A)

\begin{array} { l l } \text { Dr. Loan Payable } & \$ 200,000 \\\text { Cr. Loan Receivable } & \$ 200,000\end{array}

\begin{array} { l l } \text { Dr. Loan Payable } & \$ 200,000 \\\text { Cr. Loan Receivable } & \$ 200,000 \\\text { Dr. Interest Revenue } & \$ 20,000 \\\text { Cr. Interest Payable } & \$ 20,000\end{array}

\begin{array} { l c } \text { Dr. Loan Payable } & \$ 200,000 \\\text { Cr. Loan Receivable } & \$ 200,000 \\\text { Dr. Interest Revenue } & \$ 20,000 \\\text { Cr. Interest Expense } & \$ 20,000 \\\text { Dr. Accrued Interest Payable } \$ 2000 & \\\text { Cr. Accrued Interest Receivable } \$ 2000\end{array}

\begin{array}{l}\text { Entry } \mathrm { C } \text { plus: }\\\begin{array} { l l } \text { Dr. Deferred Tax Asset } & \$ 600 \\\text { Cr. Income Tax expense } & \$ 600 \\\text { Dr. Income Tax expense } & \$ 600 \\\text { Cr. Deferred Tax Liability } & \$ 600\end{array}\end{array}

Using the Same Facts as Question 14 but Assuming That

Multiple Choice

Correct Answer:VerifiedUnlock this answer nowGet Access to more Verified Answers free of chargeAccess For Free

Correct Answer:
Verified
Unlock this answer now
Get Access to more Verified Answers free of charge