An acquisition requires revaluation of a subsidiary's date-of-acquisition plant assets from a book value of $40 million to a fair value of $25 million. The plant assets have a 10-year remaining life at the date of acquisition. Which statement is true concerning the eliminating entries for this revaluation?

Select one:

A. In the third year following acquisition, eliminating entry (R) increases plant assets by $3 million.

B. In the first year following acquisition, the net effect of eliminating entries (R) and (O) is to reduce plant assets by $15 million.

C. In the second year following acquisition, eliminating entry (O) reduces depreciation expense by $1.5 million.

D. In the second year following acquisition, eliminating entry (R) reduces plant assets by $3 million.