Intra group loan interest

Dear Sir, I know that for CSOPL we eliminate the effect of interest on the loan from finance costs and investment income by the same amount. But I have a doubt in the following question where you had said that the Group retained earnings reduced by 160000 in this post https://opentuition.com/topic/intra-group-loan/ I have bought latest BPP exam kit and now they rectified this same question's answer from C to D. ”On 1 July 20×7, Spider acquired 60% of the equity shares capital of FLY and on that date made a $10Mn loan to FLY at a rate of 8% per annum. What will be the effect on group retained earnings at the year-end date of 31 December 20×7 when this intragroup transaction is cancelled. A) RE will increase by $400K B) RE will be reduced by $240K C) RE will be reduced by $160K D) There will be no effect on group retained earnings." But I know that we actually take into account the effect of the interest when we workup the group retained earning. So why the Answer is D now. I have got C as my answer.