Big Company Owns 100% of the Outstanding Common Stock of Small

question 163

Multiple Choice

Big Company owns 100% of the outstanding common stock of Small Company.Small Company borrowed $10,000 from Big Company.What elimination entry is required for this transaction?

• A)debit Note Payable for $10,000 and credit Note Receivable for $10,000
• B)debit Note Receivable for $10,000 and credit Note Payable for $10,000
• C)debit Common Stock for $10,000 and credit Note Receivable for $10,000
• D)debit Note Payable for $10,000 and credit Investment in Subsidiary for $10,000