Frazer Corporation purchased 60 percent of Minnow Corporations voting common stock on January 1, 20X1. On December 31, 20X5, Frazer received $264,000 from Minnow for a truck Frazer had purchased on January 1, 20X2, for $314,000. The truck is expected to have a 10-year useful life and no salvage value. Both companies depreciate trucks on a straight-line basis.

Required:

a.

Prepare the worksheet consolidation entry or entries needed at December 31, 20X5, to remove the effects of the intercompany sale.

Record the entry to eliminate the gain on the truck and to correct the asset's basis.

Gain on sale	75,600
truck	50,000
Accumalated depreciation		125,600

b.

Prepare the worksheet consolidation entry or entries needed at December 31, 20X6, to remove the effects of the intercompany sale.

Record the entry to eliminate the gain on the truck and to correct the asset's basis.

investment in Minnow Corp	75,600
truck	50,000
Accumulated Depreciation		125,600

Record the entry to adjust Accumulated Depreciation.

Accumulated Depreciation	xxxxx
Depreciation expense		xxxxxx

Just need help with the last entry, please explain