Coronado Inc. purchased equipment for $1404000 in 2025. Three years later, the equipment has accumulated depreciation of $553000 and Coronado has concerns that the equipment has been impaired. Future cash flows are estimated to be $893000. The current fair value of the equipment is estimated to be approximately $702000. The journal entry to record the impairment loss on the equipment will include O credit to Loss on Impairment for $74500. O credit to Accumulated Depreciation - Equipment for $74500. O credit to Accumulated Depreciation - Equipment for $21222. O no impairment has occurred, so no journal entry is required.

Coronado Inc. purchased equipment for $1404000 in 2025. Three years later, the equipment has accumulated depreciation of $553000 and Coronado has concerns that the equipment has been impaired. Future cash flows are estimated to be $893000. The current fair value of the equipment is estimated to be approximately $702000. The journal entry to record the impairment loss on the equipment will include O credit to Loss on Impairment for $74500. O credit to Accumulated Depreciation - Equipment for $74500. O credit to Accumulated Depreciation - Equipment for $21222. O no impairment has occurred, so no journal entry is required.

Intermediate Accounting: Reporting And Analysis

3rd Edition

ISBN:9781337788281

Author:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Publisher:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Chapter10: Property, Plant And Equipment: Acquisition And Subsequent Investments

Section: Chapter Questions

Problem 6RE

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