A Ltd has is the parent company of B Ltd and owns B Ltd to 100%. At the beginning of the current period, A Ltd sold some old machinery to B Ltd for $81,000.

The machinery originally cost A Ltd $500,000, is four years old and had accumulated depreciation of $400,000 at the date of the sale.

The remaining useful life of the machinery was confirmed by independent experts engaged by A to be a further two years.

The Accountant who is preparing the consolidated statement was mumbling something about not recording these transactions. Wont the accounts then be incomplete?

Please explain what I need to do with the transaction and show any journal entries necessary.