Poway Inc. owned 80% of the outstanding common stock of Solana Co. On January 1, 2018, Poway acquired equipment with a ten-year life for $900,000. No salvage value was anticipated and the equipment was to be depreciated on the straight-line basis. On January 1, 2020, Poway sold this equipment to Solana for $784,000. At the time, the equipment had a remaining life of eight years but still no expected salvage value. In preparing financial statements for 2020, how does this transfer affect the calculation of consolidated net income?

A. Consolidated net income should be increased by $72,000

B. Consolidated net income should be increased by $56,000

C. Consolidated net income should be reduced by $56,000

D. Consolidated net income should be reduced by $64,000

E. Consolidated net income should be reduced by $72,000

F. Consolidated net income should be increased by $64,000