Problem: On January 2, 2003, Payne Company, a 60 percent owned subsidiary, sold equipment to its parent company, Jones Corporation, for $276,000. The equipment originally was purchased at the beginning of 1999 for $760,000 and was being depreciated on a straight-line basis over a 10-year period. The equipment was not expected to have any residual value. There was no change in the estimated life or residual value of the equipment at the time of the intercompany sale.
Required:
Give all eliminating entries related to the equipment that would be needed in workpapers to prepare consolidated financial statements for 2003 and 2004.