Winter Limited Paid an Interim Dividend of $5 000 to Its

Multiple Choice

Winter Limited paid an interim dividend of $5 000 to its parent entity. If the tax rate is 30%, what would be the adjustment made in the consolidation entry to record the tax effect of this transaction?
I made a change to the original question, as the original question is very similar to Q4.

A) No tax effect entry required.
B) DR Deferred Tax Asset $1 500
C) DR Income Tax Expense $1 500
D) DR Retained Earnings $1 500