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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![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.](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2Fc4afc761-7528-48e5-b8e4-d92b612a2273%2F878c33ad-07ae-4f45-82a7-4f58b53b820d%2Fkvvqbcf_processed.jpeg&w=3840&q=75)
Transcribed Image Text: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.
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