Assume a companys equipment carries a book value of $4,000 ($4,500 cost less $500 accumulated depreciation) and

Question:

Assume a company’s equipment carries a book value of $4,000 ($4,500 cost less $500 accumulated depreciation) and a fair value of $3,750, and that the $250 decline in fair value in comparison to the book value meets the 2-step impairment test. Prepare the entry to record this $250 impairment.