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Coronado Company owns equipment that cost $1,008,000 and has accumulated depreciation of $425,600. The expected future...

Coronado Company owns equipment that cost $1,008,000 and has accumulated depreciation of $425,600. The expected future net cash flows from the use of the asset are expected to be $560,000. The fair value of the equipment is $448,000.

Prepare the journal entry, if any, to record the impairment loss.

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Answer #1

Carrying value = $1008000-425600 = $582400

Impairment Loss = Carrying value - recoverable value

= 582400 - 448000

= $134,400

Accounts Debit Credit
Impairment loss $134400
Accumulated depreciation - Equipment $134400
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