On January 1, 20X7, Servant Company Purchased a Machine with an Expected

Multiple Choice

On January 1, 20X7, Servant Company purchased a machine with an expected economic life of five years. On January 1, 20X9, Servant sold the machine to Master Corporation and recorded the following entry: Master Corporation holds 75 percent of Servant's voting shares. Servant reported net income of $50,000, and Master reported income from its own operations of $100,000 for 20X9. There is no change in the estimated economic life of the equipment as a result of the intercorporate transfer.
Based on the preceding information, in the preparation of the 20X9 consolidated balance sheet, machine will be:

A) debited for $1,000.
B) debited for $15,000.
C) credited for $45,000.
D) debited for $25,000.