If a Parent Company Borrows Money from Its Subsidiary, What

question 61

Multiple Choice

If a parent company borrows money from its subsidiary, what effect (if any) will this have on the non-controlling interest?

• A) This would have no effect on the non-controlling interest.
• B) The subsidiary would book its pro-rata share of any interest revenue.
• C) The non-controlling interest balance would be reduced by the amount of the loan.
• D)The subsidiary would record any interest revenue as an extraordinary gain.

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