Presented below is net asset information related to the Carlos Division of Santana, Inc. Cash Carlos Division Net Assets As of December 31, 2025 (in millions) Accounts receivable Property, plant, and equipment (net) Goodwill Less: Notes payable Net assets $50 200 2,600 200 (2,700) $350 The purpose of the Carlos Division is to develop a nuclear-powered aircraft. If successful, traveling delays associated with refueling could be substantially reduced. Many other benefits would also occur. To date, management has not had much success and is deciding whether a write-down at this time is appropriate. Management estimated its future net cash flows from the project to be $400 million. Management has also received an offer to purchase the division for $335 million (deemed an appropriate fair value). All identifiable

Presented below is net asset information related to the Carlos Division of Santana, Inc. The purpose of the Carlos Division is to develop a nuclear-powered aircraft. If successful, traveling delays associated with refueling could be substantially reduced. Many other benefits would also occur. To date, management has not had much success and is deciding whether a write-down at this time is appropriate. Management estimated its future net cash flows from the project to be $400 million. Management has also received an offer to purchase the division for $335 million (deemed an appropriate fair value). All identifiable Prepare the journal entry to record the impairment 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 hot indent manually. List debit entry before credit entry.) At December 31,2026 , it is estimated that the division's fair value increased to $345 million. Prepare the journal entry to record this increase in fair value. (If no entry is required, select "No Entry" for the account titles and enter O for the amounts. Credit account titles are automatically indented when amount is entered. Do not indent manually. List debit entry before credit entry.)