Prepare entries related to this equipment for pepper

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Question - Pepper acquires 80% of Salt on January 1, 2011 and uses the equity method to account for its investment in Salt. On January 2, 2011, Pepper sells equipment with a 10-year remaining life and an original cost of $5 million to Salt for $4,500,000. Accumulated depreciation on the transfer date was $2 million. Assume the equipment was sold to an outside party on 1/2/ 2013 for $3.8 million.

Required: Prepare 2011, 2012 and 2013 entries related to this equipment for Pepper and Salt in their internal record.

Reference no: EM132054384

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