Presented below is information related to equipment owned by Novak Company at December 31, 2020.

Cost $11,250,000 Accumulated depreciation to date 1,250,000 Expected future net cash flows 8,750,000 Fair value 6,000,000

Assume that Novak will continue to use this asset in the future. As of December 31, 2020, the equipment has a remaining useful life of 4 years.

(a) Prepare the journal entry (if any) to record the impairment of the asset at December 31, 2020. (If no entry is required, select "No entry" for the account titles and enter 0 for the amounts. Credit account titles are automatically indented when amount is entered. Do not indent manually.)

(b) Prepare the journal entry to record depreciation expense for 2021. (If no entry is required, select "No entry" for the account titles and enter 0 for the amounts. Credit account titles are automatically indented when amount is entered. Do not indent manually.)