A company purchased a computer that cost $10,000. It had an estimated service life of five years and no residual value. The computer was depreciated by the straight-line method and was sold at the end of the second year of use for $6,000 cash. The company should record: A loss of $1,000. A gain of $1,000. Neither a gain nor a loss - the computer was sold at its book value. Neither a gain nor a loss-the gain that occurred in this case would not be recognized. Impairment occurs when: A long-term asset's book value exceeds the present value of the expected future cash flows generated for the asset. The expected future cash flows of a long-term asset exceed the asset's book value. The present value of the expected future cash flows of a long-term asset exceeds the asset's book value A long-term asset's book value exceeds the expected future cash flows generated for that asset