QUESTION 4 When equipment becomes obsolete and there is a material, permanent decline in its fair value relative to book value, the equipment should delay recording a write down to fair value until the effect of the write-down will have a minimal effect on financial results. should continue to be depreciated in accordance with original plans without any write-down to fair value. has become impaired and the company should immediately record a write-down to the new fair value time the write-down in accordance with earnings management. QUESTION 5 Entity Hissued 1,000 shares of $100 par preferred stock at $103 per share. Which is the correct journal entry? Dr. Cash 103,000 Cr. Bonds payable 100,000 Cr Premium on bonds payable 3,000 Dr. Cash 103,000 Cr. Preferred stock 103,000 Dr. Cash 103.000 Cr. Common stock 100,000 Cr. Paid in capital in excess of par 3.000 Dr. Cash 103.000 Cr. Preferred stock 100,000 Cr. Paid in capital in excess of par 3,000