Palm Corporation Acquired All the Stock of Sequoia Company, at an Acquisition

Palm Corporation acquired all the stock of Sequoia Company, at an acquisition cost that was $5,000,000 in excess of Sequoia's $1,000,000 book value. All of Sequoia's assets and liabilities are carried at amounts approximating fair value, except that land is overvalued by $500,000 and long-term debt is overvalued by $200,000. Which of the following is false concerning the consolidation eliminating entries at the date of acquisition?

A) Eliminating entry (E) reduces the investment by $1,000,000
B) Eliminating entry (R) increases long-term debt by $200,000
C) Eliminating entry (R) reduces the investment by $5,000,000
D) Eliminating entry (R) increases goodwill by $5,300,000