Rudolph Company, an 80% owned subsidiary of Trey Company, purchased land from Trey on March 1, 2017, for $75,000. The land originally cost Trey $60,000. Rudolph reported net income of $125,000 and $140,000 for 2017 and 2018, respectively. Trey uses the equity method to account for its investment.

a) Compute the gain or loss on the intra-entity transfer of land that should be reported on the books of Rudolph prior to consolidation.

b) On a consolidation worksheet, what journal entry would be made for 2017 regarding the land transfer

c) On a consolidation worksheet, having used the equity method, what journal entry would be made for 2018 regarding the land transfer?