M9-8 (Algo) Recording Asset Impairment Losses [LO 9-4, LO 9-5]

After recording depreciation for the current year, Media Mania Incorporated decided to discontinue using its printing equipment. The equipment had cost $752,000, accumulated depreciation was $554,000, and its fair value (based on estimated future cash flows from selling the equipment) was $52,000.

Required:

1. Determine whether the equipment is impaired.
2. Prepare the journal entries to record the impairment in asset if any.

The fair value is_____and the book value is_____therefore this asset_____Impaired.

2.a Record the entry remove accumulated depreciation.

2. Record the impairment loss