Which of the following statements is true regarding an intra-entity sale of land?

In a downstream intra-entity sale of land in the year the transaction occurs, the parent recognizes the gain or loss on its income statement in the year the subsidiary sells the land to an outside third party.

In an upstream intra-entity sale of land in the year the transaction occurs, the parent recognizes the gain or loss on its income statement even though such gain or loss is eliminated in the consolidated income statement.

A gain or loss is eliminated by adjusting stockholders' equity through comprehensive income.

In a downstream intra-entity sale of land in the year the transaction occurs, the parent recognizes the gain or loss on its income statement even though such gain or loss is eliminated in the consolidated income statement until the subsidiary sells the land to an outside third party.

In a downstream intra-entity sale of land in the year the transaction occurs, the subsidiary recognizes the gain or loss on its income statement even though such gain or loss is eliminated in the consolidated income statement.