L Ltd acquired 100% of M Ltd in 20x5. At the date of acquisition, M Ltd had a piece of machinery carried in its book at an amount lower than its fair value. This piece of machinery was used by M Ltd for 10 years from 20x2. For the 20x8 consolidation, the following consolidation journal entry was shown

Dr Depreciation expense

Cr Accumulated depreciation: Machinery

Required: briefly explain the purpose of the above CJE

In 20x5, P Ltd sold a piece of machinery to its subsidiary, Q Ltd, at an amount higher than its carrying amount. The machinery was to be used by Q Ltd for the next 5 years. For the 20x8 consolidation, the following consolidation journal entry was shown

Dr Accumulated depreciation: Machinery

Cr Depreciation expense

Required: briefly explain the purpose of the above CJE