Panda Co. owns 75% of Snake Co. On January 1, 2020, Snake sold a piece of machinery to Panda for $540,000. Snake originally bought the machinery on January 1, 2019 for $400,000 and it is expected to have a useful life of 10 years. Panda and Snake report their capital assets net of amortization. Snake's tax rate is 35%, Panda's is 40%.

Required: Prepare all necessary elimination entries for this intercompany transaction for consolidation at Dec 31, 2021.