A Parent Entity Has Recognised an Increase of $50 000

Multiple Choice

A parent entity has recognised an increase of $50 000 in a Loan Receivable from a foreign subsidiary as a result of a change in exchange rates. On consolidation the following adjustment is necessary:

A) $\begin{array} { l c c } \text { DR } & \text { Exchange gain } & \$ 50,000 \\\text { CR } & \text { Foreign currency translation reserve } & \$ 50,000 ;\end{array}$
B) $\begin{array} { l c c c } \text { DR } & \text { Exchange gain } & \$ 50,000 & \\\text { CR } & \text { Loan receivable } & & \$ 50,000 ;\end{array}$
C) $\begin{array} { l c c c } \text { DR } & \text { Loan receivable } & \$ 50,000 & \\\text { CR } & \text { Foreign currency translation reserve } & \$ 50,000 ;\end{array}$
D) $\begin{array} { l c c c } \text { DR } & \text { Foreign currency translation reserve } & \$ 50,000 & \\\text { CR } & \text { Exchange gain } & \$ 50,000 .\end{array}$