McGuire Company acquired 90 percent of Hogan Company on January 1, 2014, for $234,000 cash. This amount is reflective of Hogan's total fair value. Hogan's stockholders' equity consisted of common stock of $160,000 and retained earnings of $80,000. An analysis of Hogan's net assets revealed the following: Picture Any excess consideration transferred over fair value is attributable to an unamortized patent with a useful life of 5 years. In consolidation at January 1, 2014, what adjustment is necessary for Hogan's Equipment account?

No adjustment is necessary.

$3,600 increase.

$3,600 decrease.

$4,000 decrease.

$4,000 increase.