Paco Company acquired 80 percent ownership of Salad Corporation in 20X5, at underlying book value. Paco purchased inventory from Salad for $150,000 on July 24, 20X6, and resold 90 percent of the inventory to unaffiliated companies on November 11, 20X6, for $160,000. Salad produced the inventory sold to Paco for $120,000. The companies had no other transactions during 20X6. Required: 1. Prepare the journal entry recorded by Paco to defer the unrealized gross profit on intercompany sales in 20X6. Assuming that Paco uses the fully adjusted equity method. 2. Prepare the consolidation entry to eliminate intercompany sales.