Prepare all journal entries for p and s

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Question - P Company owns 60% of the outstanding common stock of S company. On January 1, 2016, P Company sold equipment to S company for $300,000. The equipment cost P Company $100,000 on January 1, 2010. The useful life at the time of the sale was determined to be 10 years. After the sale from P to S, the management of S company estimated that the equipment had a remaining useful life of 8 years.

Required - Prepare all journal entries for P and S (from initial purchase of equipment from 3rd parties, depreciation from initial purchase to sale between the related parties) on January 1, 2016. In addition, prepare the adjustment to depreciation on Dec. 31, 2016.

Reference no: EM133093205

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