Problem
On January 1, 2007, Black Corporation sold equipment to Levant Company, for $840,000. Levant Company owns 70 % Black Corporation stock. The equipment originally was purchased at the beginning of 2004 for $1,920,000. Levant continued to depreciate the equipment, with an original 5 year useful life, on a straight-line basis over its remaining 2-year life. The equipment's residual value is considered negligible.
Required:
Give all eliminating entries related to the equipment that would be needed to prepare consolidated financial statements for 2007 and 2008.