A parent owns all of its subsidiary. At the beginning of the current year, the parent sells equipment carried on its books at $$40,000$

to its subsidiary for $$50,000.$ The equipment has a $2-$year remaining life, straight$-$line.

What is the effect of the above on equity in net income for the current year, reported on the parent's books, assuming the parent

uses the complete equity method?

$$8,000$ decrease

$$5,000$ decrease

$$4,000$ decrease

No effect