Jay Inc. owns 80% of Tesla Inc. and uses the cost method to account for its investment. The 2020 income statements of both companies are shown below. Jay S100.000 $30,000 Tesla $50,000 Gross Profit Miscellaneous Revenues/Losses Depreciation Expense Income Tax Expense Net Income $15.000 $20,000 $20.000 $30.000 S 9000 On January 1, 2020. Tesla sold equipment to Jay at a profit of $3,000. The equipment had a remaining useful life of twenty years on that date. Both companies are subject to an effective tax rate of 40% The amount of income tax expense appearing on Jay's 2020 Consolidated Income Statement would be Multiple Choice Multiple Choice $24,860. $26,000. $25,040. $34,880