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Waddington Inc. owned all of the outstanding stock of Convington Co. The subsidiary had bonds payable outstanding on January 1, 2020, with a book value of $270,000. The parent acquired the bonds on that date for $291,000. Subsequently, Waddington reported interest income of $26,000 in 2020 while Convington reported interest expense of $31,000. Consolidated financial statements were prepared for 2021. What adjustment would be required for the retained earnings balance as of January 1, 2021? A) Reduction of $5,000. B) Reduction of $16,000. C) Reduction of $26,000. D) Reduction of $31,000. Reduction of $57,000. E) O & D O b. C OC. B Od. E Oe. A