how to account for unwinding of discount amount

The double entry is:

Dr Finance costs (say) $30
Cr Loan payable $30

Now that debit to Finance Costs works its way through to the parent company’s statement of profit or loss account which itself is an integral element of the parent’s retained earnings

“We don’t need to separately debit/reduce R/e in the CSPF”

When you make the $30 adjustment, in a question asking for statement of financial position, the adjustment will feature in working W3, Consolidated Retained Earnings, in the parent’s column

If the question is asking for statement of profit or loss, that $30 is added to the parent’s finance costs when you are adding across the various expenses of the parent and the subsidiary

Is that clearer?