Presented below is information related to equipment owned by Davis Company at December 31, 2020. Cost $7,750,000 Accumulated Depreciation to date 750,000 Expected future net cash flows 6,250,000 (undiscounted) Fair value 6,600,000 Assume that Davis intends to dispose of the asset in the coming year. It is expected the cost of disposal will be $15,000. As of December 31, 2020, the equipment has a remaining useful life of 5 years. Instructions: 1. Prepare the journal entry (if any) to record the impairment of the asset at December 31, 2020. 2. Prepare the journal entry to record depreciation expense for 2021. 3. The asset was not sold by December 31, 2021. The fair value of the equipment on that date is $6,825,000. Prepare the journal entry (if any) necessary to record the increase in fair value. It is expected that the cost of disposal is still $15,000.