$-$ On January $1,20$X$1$ Pepper purchased $90\%$ interest in Salt for $$900$K$.$ At the time of the purchase, Salt's assets and liabilities were equal to book value except for Inventory, Building and Land $($which had fair values in excess of book value of $($ $$20$K $),$ $$90$K and $$120$K respectively$).$ Net Asset BV at the time of purchase was $$450$K$.$ Included in the $$900$K purchase price was a covenant not to compete. The convent was valued at $$50$K and is for a two$-$year period. At the time of the purchase, it was determined that all of Salt's depreciable assets had a remaining $5-$year life.

The following occurred during the year:

$1-$Pepper sold inventory with an original cost of $$170$K to Salt for $$210$K$.$ Salt sold $80\%$ to a third party for $$240$K and had $20\%$ of the inventory remaining at the end of the year

$2-$ On January $1,20$X$1$ Salt borrowed $$300$K from Pepper at $11\%$ interest. Salt paid $$25$K of the interest and had a payable to Pepper at year end for the remaining difference. Pepper had a corresponding receivable on its books at the end of the year

$3-$ At December $31,20$X$1,$ Pepper determined that $50$K of the GW in Salt was impaired.

$4-$ On January $1,20$X$1,$ Salt sold equipment $($that was originally purchased for $80$K and had an associated depreciation of $40$K$.$ Salt sold the equipment to pepper for $50$K$.$ At the time of the sale, it was determined that the equipment had a $5$ year life remaining.

$5-$ Salt paid Pepper $55$K for accounting and tax services during the year. Pepper incurred $40$K in costs providing those services to Salt.

$$Questions:

a$-$ Prepare the intercompany elimination entry for Event #$2$ at December $31,20$X$1$

$$

b$-$ Prepare the intercompany elimination entry for Event #$4$ at December $31,20$x$1$