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The information that follows relates to equipment owned by Sweet Acacia Limited at December 31, 2020: Cost $9,630,000 Accumulated depreciation to date 1,070,000 Expected future net cash flows (undiscounted) 7,490,000 Expected future net cash flows (discounted, value in use) 6,794,500 Fair value 6,634,000 Costs to sell (costs of disposal) 53,500 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 $53,500. Your answer is partially correct. 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 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 $6.96 million. Prepare the journal entry, if any, to record the increase in fair value. It is expected that the costs of disposal will total $53,500. No. Account Titles and Explanation Debit Credit (1) Loss on Impairment 1926000 Accumulated Impairment Losses - Equipment 1926000 (2) Depreciation Expense 481500 Accumulated Depreciation - Equipment 481500 (3) No Entry 0 No Entry 0 e Textbook and Media List of Accounts Your answer is partially correct. Repeat the requirements in (a) above assuming that Sweet Acacia is a public company that follows IFRS, and that the asset meets all criteria for classification as an asset held for sale. (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 for the amounts.) Account Titles and Explanation Debit Credit (1) Loss on Impairment 1765500 Accumulated Depreciation - Equipment 1765500 (2) Depreciation Expense 1698625 Accumulated Depreciation - Equipment 1698625 (3) Accumulated Impairment Losses - Equipment 1765500 Loss on Impairment 1765500