On May 1, 2003, Spe Company sold to Pub Corporation, its parent company, for $120,000 machinery with a carrying amount of $90,000 (net of $10,000 accumulated depreciation), a remaining economic life of six years, and no residual value. Pub adopted the straight-line method of depreciation for the machinery. Pub owns 80% of Spe's outstanding common stock.
a. Prepare Spe Company's May 1, 2003, journal entry to record the sale of the machinery. Omit explanation and disregard income taxes.
b. Prepare a working paper for Pub Corporation and subsidiary summarizing the working paper eliminations (in journal entry format) with respect to the machinery for the three fiscal years ending April 30, 2006. Omit explanations and disregard income taxes. Use the following format:

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The Answer of On May 1, 2003, Spe Company sold to Pub Corporation, its parent company, for $120,000 machinery with a carrying amount of $90,000 (net of $10,000 accumulated depreciation), a remaining economic life of six years, and no residual value. Pub adopted the straight-line method of depreciation for the machinery. Pub owns 80% of Spe's outstanding common stock.
a. Prepare Spe Company's May 1, 2003, journal entry to record the sale of the machinery. Omit explanation and disregard income taxes.
b. Prepare a working paper for Pub Corporation and subsidiary summarizing the working paper eliminations (in journal entry format) with respect to the machinery for the three fiscal years ending April 30, 2006. Omit explanations and disregard income taxes. Use the following format:

On May 1, 2003, Spe Company Sold to Pub Corporation