RRR company has a piece of equipment purchased four years ago at $88 million, with a current book value of $42.5 million. The manager of RRR company suspects impairment due to technology changes and estimates undiscounted future cash flows of $36 million from continuing to use the equipment. The fair value today of the equipment is $32 million.

a. Show all the steps in the computation of impairment loss,

b. Provide journal entries, if any associated with recognizing impairment loss.