I have to provide loan to child subsidiary from the root(parent) subsidiary. Then the child subsidiary will be paying interest on monthly instalments.

the way I've seen it done: 1 account : due to XYZ sub (all subs - other current liability) 1 account: loan from ABC sub (all subs - other current asset) create appropriate journal to credit account DUE to XYZ and to debit Loan from ABC memorized intercompany journal for interest payment, or memorized intercompany sale/purchase