On January 1, 2017, Honor Corp. sold equipment to AP Inc. for $90,000 in cash. The equipment originally cost $80,000 but had a book value of only $50,000 when transferred. On that date, the equipment had a five-year remaining life. Both companies compute depreciation expense using the straight-line method. Honor reported $170,000 of net income in 2018 (not including any investment income) while AP reported $80,000. Assume there is no excess amortization related to the original investment. Honor owned 85% of AP.

1. For 2018, what is consolidated net income to the non-controlling and controlling interests?

2. Prepare 2018 consolidated entries related to the equipment.