Presented below is information related to equipment owned by Splish Company at December $31,2025.$

Cost

$$11,160,000$

$1,240,000$

$8,680,000$

$5,952,000$

Accumulated depreciation $to$ date $1,240,000$

Expected future net cash flows $8,680,000$

Fair value $5,952,000$

Assume that Splish will continue to use this asset in the future. As of December $31,2025,$ the equipment has a remaining useful life of $5$ years.

$($a$)$

Correct Answer

Your answer is correct.

Prepare the journal entry $($if any$)$ to record the impairment of the asset at December $31,2025.($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. List debit entry before credit entry.$)$

Date Account Titles and Explanation

Debit

Credit

Dec. $31$

Accumulated Depreciation $-$ Equipment

Prepare the journal entry to record depreciation expense for $2026.($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. List debit entry before credit entry.$)$

$\backslash$table$[[$Account Titles and Explanation,Debit,Credit$]]$