During the year ended 30 June 2021, 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? a. Rent revenue Dr 200 000 Rent expense Cr 200 000 b. Rent revenue Dr 200 000 Rent expense Cr 200 000 Income tax expense Dr 60 000 Deferred tax liability Cr 60 000 c. Rent revenue Dr 200 000 Rent expense Cr 200 000 Deferred tax asset Dr 60 000 Income tax expense Cr 60 000 d. Rent expense Dr 200 000 Rent revenue Cr 200 000
During the year ended 30 June 2021, 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
a. |
Rent revenue |
Dr |
200 000 |
|
|
Rent expense |
Cr |
|
200 000 |
|
|
|
|
|
b. |
Rent revenue |
Dr |
200 000 |
|
|
Rent expense |
Cr |
|
200 000 |
|
Income tax expense |
Dr |
60 000 |
|
|
|
Cr |
|
60 000 |
|
|
|
|
|
c. |
Rent revenue |
Dr |
200 000 |
|
|
Rent expense |
Cr |
|
200 000 |
|
|
Dr |
60 000 |
|
|
Income tax expense |
Cr |
|
60 000 |
|
|
|
|
|
d. |
Rent expense |
Dr |
200 000 |
|
|
Rent revenue |
Cr |
|
200 000 |
Journal entries are first step of recording of accounting transactions. These are recorded in chronological order with double entry system. Both debit and credit should be equal.
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