Factory equipment was purchased by a company. At the end of year 2, the following information was available regarding the equipment.

Historical cost 1,700,000 and expected future cash flows of 1,400,000, resulting in a difference of 300,000

Current carrying value of 1,400,000 and fair value of 1,250,000, resulting in a difference of 150,000

What should be included in the journal entry to record the loss on impairment?

1. Debit Deprecation expense 300,000

2. Debit Deprecation expense 150,000

3. Credit Accumulation deprecation-equipment for 300,000

4. Credit Accumulation deprecation-equipment for 150,000