Parent Company holds 85 percent of Surrogate Companys voting common shares. On December 31, 20X8, Parent recorded a loss of $24,000 on the sale of equipment to Surrogate. At the time of the sale, the equipments estimated remaining economic life was eight years. Required: a. Will consolidated net income be increased or decreased when consolidation entries associated with the sale of equipment are made at December 31, 20X8? By what amount?

b. Will consolidated net income be increased or decreased when consolidation entries associated with the sale of equipment are made at December 31, 20X9? By what amount?