Answer and Explanation:
The journal entries are shown below:
But before that following calculations need to be done
For impairment loss
Cost $9,000,000
Less: Accumulated Deprecation-equipment $1,000,000
Net Value $8,000,000
Less: Fair value $4,800,000
Loss on Impairment $3,200,000
For depreciation expense
Fair value $4,800,000
Life 4 years
Depreciation Expenses $ 1,200,000
The journal entries are as follows:
1 Loss on Impairment $3,200,000
To Accumulated Deprecation-equipment $3,200,000
(being loss on impairment is recorded)
2 Depreciation Expenses $1,200,000
To Accumulated Deprecation-equipment $1,200,000
(Being depreciation expense is recorded)
3 No Journal Entry is required
The journal entries of the above transactions are shown in the image below.
Journal entry is the of recording all the financial transactions of the business in which all the business transactions are recorded whether it is actually received or not.
Computation of the amount of the journal entry:
Amount for impairment of the loss:
According to the given information,
Cost = $9,000,000
Accumulated Deprecation-equipment = $1,000,000
Fair value = $4,800,000
Now put the values in the formula,
[tex]\text{Loss on Impairment} = \text{Cost} - \text{Accumulated Deprecation}- \text{Fair Value}\\\text{Loss on Impairment} = \$9,000,000 - \$1,000,000 - $4,800,000\\\text{Loss on Impairment} = \ $3,200,000[/tex]
Therefore, the journal entry of the above transactions are given in the image below.
Learn more about the journal entry, refer to:
https://brainly.com/question/15889958
