Explanation:
Box 1: Legal entity
Box 2: Legal entity for elimination
Elimination transactions are required when a parent legal entity does business with one or more subsidiary legal entities and uses consolidated financial reporting. Consolidated financial statements must include only transactions that occur between the consolidated organization and other entities outside that organizations.
Therefore, transactions between legal entities that are part of the same organization must be removed, or eliminated, from the general ledger, so they don't appear on financial reports. There are multiple ways to report about eliminations:
An elimination rule can be created and processed in a consolidation or elimination company.
Financial reporting can be used to show the eliminations accounts and dimensions on a specific row or column.
A separate legal entity can be used to post manual transaction entries to track eliminations.
Reference: https://docs.microsoft.com/en-us/dynamics365/finance/general-ledger/elimination-rules