Klaes, Inc. and Ashford Co. are related companies subject to consolidation. During the year, Klaes, Inc. sold manufacturing equipment to Ashford Co. for $50,000 on a note receivable / payable that had an original purchase price of $60,000 and accumulated depreciation at the time of sale of $20,000. The portion of the elimination entry at the time of consolidation to reverse out the gain or loss booked on this transaction would be:

Question 6 options:

a)

Debit Gain on Sale $40,000

b)

Debit Gain on Sale $10,000

c)

Credit Loss on Sale $10,000

d)

Credit Loss on Sale $40,000