Exercise 1 1-23 The information that follows relates to equipment owned by Sweet Acacia Limited at December 31, 2020: Cost $0,370,000 Accumulated depreciation to date 930,000 Expected future net cash ows (undiscounted) 6,510,000 Expected future net cash ows (discounted, value in use] 5,905,500 Fair value 5,766,000 Costs to sell (costs of disposal) 46,500 At December 31, 2020, Sweet Acacia discontinues use of the equipment and intends to dispose of it in the coming year by selling it to a competitor: It is expected that the costs of disposal will total $46,500. Your answer is partially correct. Try again. Your answer is partially correct. Try again. Assume that Sweet Acacia is a private company that follows ASPE. (Credit account titles are automatically indented when the amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts.) 1. Prepare the journal entry at December 31, 2020, to record asset impairment, if any. 2. Prepare the journal entry to record depreciation expense for 2021. 3. Assume that the asset was not sold by December 31, 2021. The equipment's fair value (and recoverable amount) on this date is $6.05 million. Prepare the journal entry, if any, to record the increase in fair value. It is expected that the costs of disposal will total $46,500. No. Account Tltles and Explanation Debit Credit (1} Loss on Impairment 1720500 Accumulated Impairme 1720500 ll v (2 No Entry No Entry (3} Accumulated Impairment I 284000 Recovery of Loss from 1 284000 IEn In III In In In In In In