A subsidiary sells land costing $1,000,000 to its parent in 2017 for $1,400,000. The parent owns 80 percent of the subsidiarys stock. In 2020, the parent sells the land to an outside party for $550,000. What eliminating entry (I) is required on the 2020 consolidation working paper?

Debit the subsidiarys beginning retained earnings and credit the loss on sale of land for $400,000.

Debit investment in subsidiary and credit the loss on sale of land for $400,000.

Debit the subsidiarys beginning retained earnings and credit the loss on sale of land for $450,000.

Debit investment in subsidiary and credit the loss on sale of land for $450,000.