Sloane, Inc. purchased equipment in 2005. Two years later it became apparent to Sloane, Inc. that this equipment had suffered an impairment of value. In early 2007, the book value of the equipment is $360,000 and the expected undiscounted future cash flows from this equipment is $310,000. It is estimated that the fair value is now only $240,000. The entry to record the impairment is

a.No entry is necessary.

b.DR Loss on Impairment of Equipment 50,000

CR Accumulated DepreciationEquipment 50,000

c.DR Loss on Impairment of Equipment 120,000

CR Accumulated DepreciationEquipment 120,000

d.DR Retained Earnings 120,000

CR Reserve for Loss on Impairment of Equipment 120,000