Parent and Subsidiary Corporations Have Filed Calendar- Year Consolidated Tax

Parent and Subsidiary Corporations have filed calendar- year consolidated tax returns for several years. Parent Corporation uses the cash method of accounting while Subsidiary Corporation uses the accrual method of accounting. If Parent lends Subsidiary money,

A) the interest expense is deductible when accrued.
B) the interest income is reported when the interest expense is accrued by Subsidiary.
C) the interest expense and interest income may be reported in different consolidated return years.
D) the interest expense deduction is taken when Parent reports the interest income.