Violet Ltd owns all the share capital of Indigo Ltd. The following transactions are independent: Indigo...

Violet Ltd owns all the share capital of Indigo Ltd. The following transactions are independent:

Indigo Ltd gives $55 000 as an interest-free loan to Violet Ltd on 1 July 2019. Violet Ltd made a $20 000 repayment by 30 June 2020.
Indigo Ltd rented a spare warehouse to Violet Ltd starting from 1 July 2019 for 1 year. The total charge for the rental was $3 500, and Violet Ltd paid half of this amount to Indigo Ltd on 1 January 2020 and the rest on 1 July 2020.
During March 2020, Indigo Ltd declared a $5000 dividend. The dividend was paid in August 2020.

Required

In relation to the above intragroup transactions:

1. Prepare adjusting journal entries for the consolidation worksheet at 30 June 2020.

2. Explain in detail why you made each adjusting journal entry.

Expert Solution

Second part of the answer was not reflected on my portal that why uploading it again by editing the answer.

ekkarill92 answered 3 years ago

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