Thames ford Company completely owns Salt Inc. On January 2, Y7 Thames ford sold Grand Bend machinery at its carrying amount of $30,000. Thames ford had the machinery two years before selling it and used a five-year straight-line depreciation method, with no residual value. Grand Bend will use a three-year straight-line method. 

In the Y7 consolidated income statement, the depreciation expense

increased by $4,000. 

needed no adjustment. 

increased by $30,000. 

decreased by $4,000.