During the Year Ended 30 June 2017, a Parent Entity $\begin{array}{llll}\text { Rent revenue } & \mathrm{Dr} & 200000 \\\text { Rent expense } & \mathrm{Cr} &&200000\end{array}$

Short Answer

During the year ended 30 June 2017, a parent entity rents a warehouse from a subsidiary entity for $200 000. The company tax rate is 30%. Which of the following is the consolidation adjustment entry needed at reporting date to eliminate the transaction? $\begin{array}{llll}\text { Rent revenue } & \mathrm{Dr} & 200000 \\\text { Rent expense } & \mathrm{Cr} &&200000\end{array}$


$\begin{array}{llll}\text { Rent revenue } & \mathrm{Dr} & 200000 & \\\text { Rent expense } & \mathrm{Cr} & & 200000 \\\text { Income tax expense } & \mathrm{Dr} & 60000 & \\\text { Deferred tax liability } & \mathrm{Cr} & & 60000\end{array}$

$\begin{array}{llrr}\text { Rent revenue } & \mathrm{Dr} & 200000 & \\\text { Rent expense } & \mathrm{Cr} & &200000 \\\text { Deferred tax asset } & \mathrm{Dr} & 600000 & \\\text { Income tax expense } & \mathrm{Cr} & & 60000\end{array}$

$\begin{array}{l}\text { Rent expense }&& \mathrm{Dr} &200000&\\\text { Rent revenue }&&\text { Dr } &&200000\end{array}$