Dolphin Company uses special strapping equipment in its packaging business. The equipment was purchased in January 2016 for $6,000,000 and had an estimated useful life of 8 years with no salvage value. At December 31, 2017, new technology was introduced that would accelerate the obsolescence of Dolphins equipment. Dolphins controller estimates that expected future net cash flows (undiscounted) on the equipment will be $3,750,000 and that the fair value of the equipment is $3,300,000. Dolphin intends to continue using the equipment for regular business operations, but it is estimated that the remaining useful life is now 4 years. Dolphin uses straight-line depreciation

1. Prepare the journal entry (if any) to record the impairment at December 31, 2017. Show the calculations.
2. Prepare depreciation entry for the equipment at December 31, 2018. The fair value of the equipment at December 31, 2018, is estimated to be $3,450,000.

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