1. The entries for offsetting internal transactions are:
Debit: operating income,
Loan: operating costs, inventory.
2. The entries of internal creditor's rights and debts offset are:
Debit: accounts payable,
Credit: accounts receivable.
3. Adjust the long-term equity investment in subsidiaries to the equity method (adjustment entry). For the share of net profit realized by subsidiaries in the current period,
Borrow: long-term equity investment,
Credit: investment income (or the opposite entry).
For cash dividends or profits declared by subsidiaries in the current period,
Borrow: investment income,
Loan: long-term equity investment.
For other changes in the owner's equity of subsidiaries other than net profit and loss,
Borrow: long-term equity investment,
Loan: capital reserve.