On January 1, 2016, a Parent Loaned $30,000 to Its $\begin{array}{lll}&&\text { Controlling}\\\text { Assets}&\text { Debt}&\text { Retained Earnings}\\\end{array}$

Short Answer

On January 1, 2016, a parent loaned $30,000 to its 100%-owned subsidiary on a 5-year, 8% note.The note requires a principal payment at the end of each year of $6,000 plus payment of interest accrued to date.The following accounts require adjustment in the consolidation process: ?
$\begin{array}{lll}&&\text { Controlling}\\\text { Assets}&\text { Debt}&\text { Retained Earnings}\\\end{array}$
A) $\begin{array}{lll}\text { Yes } & \text { Yes } &&&& \text { Yes } \\\end{array}$
B) $\begin{array}{lll}\text { No } & \text { No } &&&&& \text { Yes } \\\end{array}$
C) $\begin{array}{lll}\text { Yes } & \text { Yes } &&&& \text { No } \\\end{array}$
D) $\begin{array}{lll}\text { No } & \text { No } &&&&& \text { No }\end{array}$