If a parent company borrows money at an interest rate of six percent from its subsidiary, what effect (if any) will this have on the non-controlling interest?

A) This would have no effect on the non-controlling interest.
B) The subsidiary would book its pro-rata share of any interest revenue.
C) The non-controlling interest balance would be reduced by the amount of the loan.
D) The subsidiary would record any interest revenue as an extraordinary gain.

Non-Controlling Interest

A share of equity ownership in a subsidiary not attributable to the parent company, representing the portion of the subsidiary's net assets and net income not owned by the parent.

Subsidiary

A company that is controlled by another company, known as the parent company, through ownership of more than 50% of its voting stock.

Interest Revenue

Income earned on investments or money lent, represented by the amount charged to borrowers for the use of the lender's funds.