On July 1, 2012, Okin Company purchased equipment for $280,000; the estimated useful life was 10 years and the expected salvage value was $25,000. Straight-line depreciation is used. On July 1, 2016, economic factors cause the market value of the equipment to decrease to $90,000. On this date, Okin evaluates if the equipment is impaired and estimates future cash flows relating to the use and disposal of the equipment to be $125,000.

a. Is the equipment impaired at July 1, 2016?

b. If the equipment is impaired at July 1, 2016, calculate the amount of the impairment loss. Impairment loss = $

c. If the equipment is impaired at July 1, 2016, prepare the journal entry to record the impairment loss.