ncur cash outflows of $342,000 each year for the next 8 years. It is not able to determine the fair value of the equipment based on a current selling price. Borstad's discount rate is 14%. Required: 1. Prepare schedules to determine whether, at the end of Year 6 , the equipment is impaired and, if so, the impairment loss to be recognized. 2. Prepare the journal entry to record the impairment. 3. Next Level How would your answer to Requirement 1 change if the discount rate was 18% and the cash flows were expected to continue for 6 years? 4. Next Level How would your answer change if management planned to implement efficiencies that would save $11,000 each year? Complete the Recoverability Test and determine the results of the test. The book value is than the undiscounted expected net cash flows, so Borstad recognize an impairment loss at December 31, Year 6. Complete the Impairment Analysis to determine the amount of the loss (if any) under US GAAP at December 31, Year 6. 2. Prepare the journal entry on December 31 , Year 6 to record the impairment. 3. How would your answer to Requirement 1 change if the discount rate was 18% and the cash flows were expected to continue for 6 years? Borstad Company would recognize a loss of if the discount rate was 18% and the cash flows were expected to continue for 6 years. 4. How would your answer change if management planned to implement efficiencies that would save $11,000 each year? Step 1: Complete the Recoverability Test below. Step 2: Complete the following statement regarding the Recoverability Test results. The book value is than the undiscounted net cash flows, so Borstad recognize an impairment loss at December 31, Year 6