The information that follows relates to equipment owned by Waterway 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$)$

$$9,540,000$

$1,060,000$

$7,420,000$

$6,731,000$

$6,572,000$

$53,000$

At December $31,2023,$ Waterway discontinues use of the equipment and intends to dispose of it in the coming year by selling it to a

competitor. It is expected that the costs of disposal will total $$53,000.$

$($a$1-$a$3)$

Assume that Waterway is a private company that follows ASPE. $($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 $0$ for the amounts. List all debit

entries before credit entries.$)$

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

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

Assume that the asset was not sold by December $31,2024.$ The equipment's fair value $($and recoverable amount$)$ on this

date is $$6\mathrm{.}89$ million. Prepare the journal entry, if any, to record the increase in fair value. It is expected that the costs of

disposal will total $$53,000.$

No$.$ Account Titles and Explanation

$(1)$

$(2)$

$(3)$