ACY Limited ("ACY") conducted a trading business in Region ONE ("the Region"). The information below is noted for the year ended 31 December 2019 ("the year"):

The Equipment On 1 April 2019, ACY purchased an equipment at a cost of $30,000, with an estimated useful life of five years and a residual value approximate to zero. This was used in the company's head office. Cost model and straight-line depreciation method were adopted. The purchase of equipment was recorded by ACY on the same date. Near the end of December 2019, an accident occurred in the head office, leading to the partial damage of the equipment. Technician inspected the equipment and determined that its productivity has permanently deteriorated due to the physical damage occurred. This was estimated that the equipment could be resold to the market for $18,000; while its value-in-use was around $20,000 as at 31 December 2019.

The Bonds Payable On 1 January 2019, ACY issued a 10% bond with face value of $30,000 at par, due in 2025. The first interest payment is on 1 January 2020. The issue of bond was recorded immediately.

Tax Rules in the Region A standard income tax rate of 10% is charged for all taxable income, net of deductible expenses, for business (i.e. corporate taxpayers) in the Region. Normally, accounting income/(expense) is taxable/(tax-deductible) when recognised in the period, except for

(a) The local tax laws allow 100% tax deduction for the costs of all types of office equipment and machines in the year of purchase. This shall be the only tax deduction available related to these equipment and machines, regardless of the corporate taxpayer's subsequent accounting treatments on these assets.

(b) As a matter of the Region's tax policy, tax deduction for interest expenses is available only to those arising from bank borrowing. Any other interest expenses, including those from the issue of notes and bonds in any circumstances, are not allowed for tax deduction. In 2019, ACY recorded an operating profit of $330,000. However, the company has not yet recognized any depreciation, impairment loss, interest, and income tax expense for the year.

Required: (i) Advise as to whether any impairment loss shall be recognized in respect of the equipment for the year. (8 marks)

(ii) Prepare all the adjusting entries required for the year. (22 marks)