On December 31, 2016, Fresno realized that a piece of equipment may be impaired. Presented below is information related to the equipment.

Cost	$9,000,000
Expected Future net cash flows	$3,200,000

Assume that Fresno will continue to use this piece of equipment in the future. As of December 31, 2016, the equipment has a remaining useful life of 4 years and had been depreciated for six years. The equipment had no salvage value and the company uses the straight-line method for depreciation.

Requirement 1: Determine if the asset is impaired - show your work?

Requirement 2: If the asset is impaired determine the amount of the impairment loss considering that the expected cash flows are as follows. The proper discount rate to be used for these flows is 8%. (Assume that the cash flows occur at the end of the year)

Year	Expected Future Cash Flows
2017	$800,000
2018	$800,000
2019	$800,000
2020	$800,000

Requirement 3: Prepare the journal entry (if any) to record the impairment of the asset at December 31, 2016.