Rachel Ltd Provided an Advance of $100 000 to Its

Multiple Choice

Rachel Ltd provided an advance of $100 000 to its subsidiary Marion Ltd. Interest of $10 000 was charged during the year ended 30 June 2021. On consolidation, the following adjustment is needed at 30 June 2021 in relation to the interest charged:

A) no adjustment needed.
B) DR Interest expense $10 000 CR Interest revenue $10 000
C) DR Retained earnings $10 000 CR Cash $10 000
D) DR Interest revenue $10 000 CR Interest expense $10 000