Question

a company has purchase a machinery for $1000000 in 2014 the accumulated depreciation to date is $280000 as of dec 2018 the estimated useful life of the assets is 8 years and the company estimated the fair value of the machine at $600000 prepared the journal entry if any, to record the impairment of the assets at dec 31,2018​

Answer 1

Answer:

A company had purchased a machinery for $1,000,000 in 2014. The accumulated

depreciation to date is $280,000. As of December 2018, the estimated useful life of the

asset is 8 years, and the company estimated the fair value of the machine at $600,000.

Prepare the journal entry if any, to record the impairment of the asset at December 31,

2018.

a. Debit Loss on impairment account for $400,000 and credit the Accumulated

depreciation on machinery account for $400,000.

b. Debit Loss on impairment account for $120,000 and credit the Accumulated

depreciation on machinery account for $120,000.

c. Debit Accumulated depreciation on machinery account for $120,000 and credit the

Loss on impairment account for $120,000.

d. Debit Accumulated depreciation on machinery account for $400,000 and credit the

Loss on impairment account for $400,000.