A company has some bottling equipment which cost $10.80 million, has a net book value of $5.25 million, estimated future cash flows of $3.93 million, and a fair value of $3.33 million. Which of the following correctly describes the recording of the asset impairment loss?

The loss account is debited for $1.92 million and the asset account is credited for $1.92 million.

The loss account is debited for $1.32 million and the asset account is credited for $1.32 million.

The loss account is debited for $7.47 million and the asset account is credited for $7.47 million.

The loss account is debited for $6.87 million and the asset account is credited for $6.87 million.