Pat Corporation acquired 80 percent of Smack Corporation's voting common stock on January 1, 20X7. On December 31, 20X8, Pat received $390,000 from Smack for equipment Pat had purchased on January 1, 20X5, for $400,000. The equipment is expected to have a 10-year useful life and no salvage value. Both companies depreciate equipment on a straight-line basis.Based on the preceding information, in the preparation of the 20X9 consolidated financial statements, equipment will be:
A. credited for $15,000.
B. debited for $10,000.
C. debited for $1,000.
D. debited for $25,000.
Answer: B
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