Parent Company has a $50,000 note receivable from Subsidiary Company, and Subsidiary Company has a note payable to the Parent Company for $50,000. As part of the elimination entries:

Question

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As part of the elimination entries, both the note receivable and the note payable will be eliminated since they represent intercompany balances between the Parent Company and the Subsidiary Company. Eliminating both balances will ensure that they are not double-counted on the consolidated financial statements.

Parent Company Has a $50,000 Note Receivable from Subsidiary Company