On December 31, 2020, Corella Corporation sold equipment with a three-year remaining useful life and a book value of $21,000 to its 70%-owned subsidiary Hollow Company for a price of $27,000. Corella bought the equipment four years ago for $49,000.

What was the intercompany sale impact on the consolidated financial statements for the year ended December 31, 2020?

Consolidated Net Income Consolidated Net Assets

A. No effect. No effect.

B. No effect. Increased.

C. Decreased. Decreased.

D. Decreased. No effect.