On September 30, 2013 a Parent Company Sold a Piece

Multiple Choice

On September 30, 2013 a parent company sold a piece of machinery to its wholly-owned subsidiary for $10,000 which was $5,000 above its carrying amount at that date. The machinery has a remaining useful life of 5 years. What is the pre-tax adjustment required to prepare the December 31, 2013 consolidated financial statements?

A) Increase machinery-net $5,000,
B) Decrease machinery - net $5,000.
C) Record a loss of $5.000 on the income statement
D) None of the above.