Sunland, Inc. purchased equipment in $2024$ for $$887000.$ Two years later it became apparent to Sunland that this equipment had

suffered an impairment of value. In early $2026,$ the book value of the asset is $$586000$ and it is estimated that the fair value is now only

$$359000.$ The entry to record the loss on impairment is

No entry is necessary as a write$-$off violates the historical cost principle.

Retained Earnings

$227000$

Accumulated Depreciation$-$Equipment

Loss on Impairment

$227000$

Accumulated Depreciation$-$Equipment

$227000$

Retained Earnings

$227000$

Reserve for Loss on Impairment

$227000$