In a closing entry for a parent company that has a subsidiary acquired several years ago, there may be either a debit or a credit to the Retained Earnings of Subsidiary ledger account.

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In consolidation accounting, adjustments to the Retained Earnings of a subsidiary may be necessary to eliminate intercompany transactions or to adjust the subsidiary's retained earnings to fair value at the acquisition date. These adjustments can result in either a debit or a credit to the Retained Earnings of Subsidiary ledger account.

In a Closing Entry for a Parent Company That Has