Question 7 Partially correct Mark 1.62 out of 3.00 P Flag question Interr Lau Recording Entries for Impairment of Investments-Equity Method Eagle Software has an equity investment in Finch Enterprises accounted for under the equity method. The carrying value of the investment was $45,000 on December 31, 2020. At December 31, 2020, the fair value of Eagle's investment in Finch has declined to $32,000. Eagle management decides that the decline is other than-temporary because Finch lost a patent protection suit during the year and can no longer profit from some of its products, a. Record the journal entry on December 31, 2020, to recognize the impairment. Note: If a journal entry isn't required for the transaction, select "N/A" as the account names and leave the Dr and C. answers blank (zero). Cr. Date Account Name Dec 31, 2020 Loss on impairment Investment income Dr. 13,000 0 13,000 b. What is the adjusted cost basis of the equity investment on December 31, 2020? investment adjusted cost basis, Dec 31, 2020 45.000 c Assume that the fair value of the investment is $36,000 on December 31, 2021. Record the applicable journal entry. Note: If a journal entry isn't required for the transaction select "N/A" as the account names and leave the Dr. and Cr. answers blank (zero). Account Name Dec 31. 2021 Investment income Investment income Date Dr. 4,000 X 0 Cr. 0 4.000 x Check