At 30 June 2023, there was an indication that BHP Ltd machinery might be impaired. In preparing for the impairment testing, the accountants have estimated, as at 30 June 2023, the piece of machinerys fair value less costs of disposal to be $495,000 and its value in use to be $580,000. The machinery was purchased and installed on 1 July 2021 by $925,000. The machinery had estimated useful life of 8 years after which time it would have a residual value of $125,000. BHP Ltd uses the straight-line method of depreciation for this machinery.

Required:

a) Compute the impairment loss to be recorded at 30 June 2023? Show all working and provide explanations to support your answer where necessary.

b) Journalize the required entries to record the impairment loss to be recorded at 30 June 2023?