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

Windsor intends to dispose of the equipment in the coming year. It is expected that the cost of disposal will be $$21,600.$ As of

December $31,2025,$ the equipment has a remaining useful life of $5$ years.

$($a$)$

Correct Answer $($Used$)$

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

Dec. $31$ Loss on Impairment

$($b$)$

Your answer is correct.

Prepare the journal entry $($if any$)$ 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.$)$

Account Titles and Explanation

eTextbook and Media

Solution

List of Accounts

Attempts: $2$ of $2$ used

$($c$)$

The asset was not sold by December $31,2026.$ The fair value of the equipment on that date is $$5,724,000.$ Prepare the journal

entry $($if any$)$ necessary to record this increase in fair value. It is expected that the cost of disposal is still $$21,600.($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.$)$