The information that follows relates to equipment owned by Buffalo Limited at December $31,2023$:

Cost

Accumulated depreciation to date

Expected future net cash flows $($undiscounted$)$

Expected future net cash flows $($discounted$,$ value in use$)$

Fair value

Costs to sell $($costs of disposal$)$

$$7,380,000$

$820,000$

$5,740,000$

$5,207,000$

$5,084,000$

$41,000$

Assume that Buffalo will continue to use this asset in the future. As at December $31,2023,$ the equipment has a remaining useful life of four years. Buffalo uses the straight$-$line method of depreciation.

Your answer is partially correct.

Assume that Buffalo is a private company that follows ASPE.

Prepare the journal entry at December $31,2023,$ to record asset impairment, if any.

Prepare the journal entry to record depreciation expense for $2024.$

The equipment's fair value at December $31,2024,$ is $$5\mathrm{.}33$ million. Prepare the journal entry, if any, to record the increase in fair value.

$($Credit account titles are automatically indented when the amount is entered. Do not indent manually. If no entry is required, select $"$No Entry" for the account titles and enter $O$ for the amounts. List all debit entries before credit entries.$)$

No$.$ Date

Account Titles and Explanation

Debit $$

Credit

$(1)$ December

Loss on impairment

Accumulated DepletionL