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a subsidiary borrowed $150,000 from its parent in a previous year. interest payments at an annual rate of 3% are due semiannually on march 1 and september 1 of each year. the accounting year ends december 31. consolidation eliminating entries for the year include a credit to interest expense in the amount of:

Sagot :

Consolidation eliminating entries for the year includes a $ 4500 credit to interest expense.

What does the term "subsidiary borrowed" mean?

Financial Subsidiary Borrowed Money refers to any Subsidiary Borrowed Money.

  • (a) whose activities include the issuance of debt obligations to Persons other than Affiliates and the lending of the net proceeds of such debt obligations to the Company and Wholly-Owned Subsidiaries, as well as related activities (with the understanding that such Subsidiary may engage in minor activities unrelated to the issuance of debt obligations and the lending of the net proceeds of such debt obligations) and
  • (b) Has no major assets other than loan receivables from the Company or Wholly-Owned Subsidiaries.

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