Smart Corporation is a 90%-owned subsidiary of Phan Inc. On January 2, 20X1, Smart agreed to lease $400,000 of construction equipment from Phan for $3,000 a month on an operating lease. The equipment has a 10-year life and is being depreciated using the straight-line method.
Required:
Prepare the eliminations and adjustments required by the intercompany lease on the Figure 5-8 partial worksheet for December 31, 20X3. Key and explain all eliminations and adjustments. 
Definitions:
Government-delivered Services
Services provided by the government to its citizens, such as healthcare, education, and public safety.
Equipment-delivered Services
Services provided through the use of specialized equipment or machinery, often in sectors like healthcare, construction, or manufacturing.
Nonprofit-delivered Services
Services provided by organizations that operate without the primary goal of making a profit, often focused on social, educational, or charitable activities.
Fee-delivered Services
Services provided to consumers for a specific fee, often customized or tailored to individual needs.
Q10: On January 1, 20X1, Parent Company purchased
Q12: Company P had 300,000 shares of common
Q17: On January 1, 20X1, Parent Company purchased
Q22: The cash purchase of a controlling interest
Q29: Rex Corporation, a U.S. firm with a
Q31: For interim reporting, which of the following
Q34: The partnership of Able, Bower, and Cramer
Q77: The payment of Accounts Payable results in
Q122: A cookie company includes one premium coupon
Q142: A long-term leased asset would appear on