Parent Corporation sold equipment with a remaining three-year useful life and a book value of $14,500 to its 80% owned subsidiary, Sub Corporation, for $16,000 on January 2, 20X1. A consolidated workpaper entry on December 31, 20X1, to eliminate the unrealized gain from the intercompany sale of equipment will include:

Select one:

a.

A debit to gain on sale of equipment for $1,000

b.

A debit to gain on sale of equipment for $1,500

c.

A credit to depreciation expense for $1,500

d.

A debit to equipment for $1,500