Final answer:
Entry C in consolidation is necessary with initial value or partial equity methods to align the carrying amount of the investment with the parent's share of the subsidiary's equity. No similar entry is needed with the full equity method because it already reflects any changes in the subsidiary's equity.
Step-by-step explanation:
In the context of consolidation in accounting, the initial value or partial equity method may require an additional consolidating entry, often referred to as entry C. This is necessary because, with these methods, the investment in a subsidiary is recorded at cost, and subsequently adjusted for dividends and a proportionate share of the subsidiary's earnings, which could result in discrepancies with the actual equity value of the subsidiary on the parent's books. As a result, entry C ensures that the carrying amount of the investment is aligned with the parent's share of the subsidiary's equity post-acquisition.
However, when the full equity method is used, the investment is not only adjusted for dividends and share of earnings but also reflects any changes in the subsidiary's equity. This method continually aligns the investment's carrying amount with the parent's share of the subsidiary's equity, thus negating the need for an additional entry such as entry C. Since the account balances are already in line with the actual equity, further adjustment is not required during consolidation.