Interco Loan accounting entry

In  the Books of  parent  company A 

1)   Loan  to  subsidiary B         A/c    Dr          $100,00,000

      To  Bank                             A/c     Cr                                     $100,00,000

( Being  Loan given  to  Subsidiary  B company   ) 

Note - Loan to subsidiary B A/c   will be  under  Loans and  advances - Asset  Side of  balance sheet 

In the Books of  Subsidiary Company  B 

2 )  Bank                         A/c                            Dr             $ 100,00,000

      To  Loan  From  A  company                     Cr                                              $100 00 000

(  Being  loan  taken form  parent company  A) 

Note - Loan form A company  will be under  secured  loan  - Liability  Side  of  balance sheet  

Yes , next  year  Interest  on loan  will  be paid  to parent  company  , so entry as follows 

1)   In the books of  subsidiary  company 

      Interest  on Loan  A/c          Dr                     $ 400,000

     To  Bank                               Cr                                          $40,0000

(  being  interest  paid  to  parent  company  @ 4% ) 

Thanks Prasad sir,

This being intercompany loan transaction. How this will be settled while consolidating the financial statements. Can you please cover that part also

Hello Prasad I have heard that while preparing the consolidated financial statements intercompany transactions are eliminated. They are not reported. Then how it will be shown as asset on company A’s books. Please suggest whether my understanding is correct or wrong.

Thank you very much Sagar

Check  out  

schedule  III   of the Companies act  2013  , preparation  of  Consolidated  Financial  Statements 

Sir, If A is a holding company and B is a subsidiary company, B taken a loan from bank and A is the guarantor, B default to pay the loan and now A will pay the remaining loan to bank, what should be the book entries for Company A??