eterson Co. owns 100% of the outstanding common stock of Silver Corp.

For the situation below, prepare Peterson's eliminating journal entry required for consolidation purposes for the year ended December 31, year 3.

To prepare your entry:

• Double-click the shaded cells in the Account name column and select from the list provided the appropriate account name. If no entry is needed in an accounting row, select "None." An account may be used once or not at all for the entry.
• Enter the corresponding debit or credit amount in the appropriate column. If no amount entry is required in a column, enter 0.
• Round all amounts to the nearest dollar.

Situation:

On January 1, year 3, Peterson sold equipment to Silver for $120,000 cash, which was originally purchased on January 1, year 1, for $100,000. Peterson was depreciating the equipment over 10 years using straight-line depreciation. There was no salvage value. Silver decides to depreciate the equipment over eight years, also using straight-line depreciation with no salvage value. Assume all other appropriate year-end and income tax journal entries have been made.

Eliminating journal entry at December 31, year 3: