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Invested amount as Retained Earnings?

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So frustrated, hope someone can help! Parent Co. invests £1.3m. In the Subsidiary Co. it shows Share Capital £100k and Retained Earnings £1.2m. I thought the £1.3m invested in the subs. co. would be recorded in the Share Capital? I don't understand why it is in Retained Earnings? It was invested on 1/1/x1 and the date of the accounts is 1/1/x1

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