What account would be credited

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Question - Big Co. owns 60% of Little Co common stock. On 1/1/23 Big Co sold a patent to Little Co for $32,000. The patent had a book value of $20,000 on that date, with a 4 year remaining useful life.

On 5/1/26 Little sells the patent to a third party for $20,000.

Little Co reports earnings of $50,000 each year.

Big uses the FULL equity method to account for their investment in Little.

In 2026 the patent is sold to some third party. In the elimination entries related to this intercompany sale, what account __________ would be credited, for what amount ________?

Reference no: EM132838735

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