On 1 July 2021, Ocean Grove Ltd acruired and installed an item of machinery for use in its manufacturing business. When acquired the machinery cost $1200000, had an estimated useful life of 10 years, and had an expected residual value of $200000. Ocean Grove Ltd. depreciates machinery on a straight line basis over its useful life and uses the cost method. At 30 June 2023 the machinery had a carrying amount of $1000000. At the end of the 2023 reporting period, the annual review of all machinery found that this particular item of machinery had incurred significant damage as a result of being rolled down a sand dune. As a result of the damage, the engineering department estimated the fair value less costs of disposal of the machinery at the end of the reporting period was $710000. As the machinery can operate in a limited capacity, it could be expected to provide annual net cash flows of $105000 for the next eight years. the expected residual value will remain unchanged. the management of Ocean Grove ltd. uses a discount rate of 8 per cent for calculations of this kind.

Required: Determine whether Ocean Grove Ltd. has incurred an impairment loss in relation to the asset. If so, Determine the amount of the impairment loss, and provide the journal entry necessary to recognize any impairment in the machine.