Peak Corporation owns 75 percent of Summit Company's voting shares, acquired on March 21, 20X5, at book value. At that date, the fair value of the noncontrolling interest was equal to 25 percent of the book value of Summit Company.

On January 1, 20X4, Peak paid $150,000 for equipment with a 10-year expected total economic life. The equipment was depreciated on a straight-line basis with no residual value. Summit purchased the equipment from Peak on December 31, 20X6, for $140,000. Summit sold land it had purchased for $75,000 on February 18, 20X4, to Peak for $60,000 on October 10, 20X7.

Prepare the consolidation entries for 20X8 related to the sale of depreciable assets and land if Peak uses the fully adjusted equity method to account for its investment in Summit.

Summit Company $ 10,000 20,000 45,000 150,000 Cash and Receivables Inventory Land Buildings and Equipment Investment in Summit Company Stock Debits Accum. Depreciation Accounts Payable Notes Payable Common Stock Retained Eainings Credits Peak Corporation $ 70,000 46,250 140,000 250,000 93,750 $ 600.000 $ 100,000 30,000 70,000 100,000 300,000 $ 600,000 $ $ 225,000 42,500 12,500 45,000 100,000 25,000 225,000 $