Answer:
Dec 31,2020
Dr Loss on impairment $270,000
Cr Accumulated depreciation-Equipment $270,000
Explanation:
Preparation of the journal entry to record the impairment at December 31, 2020
First step is to calculate the Loss on impairment
Cost $900,000
Less: Accumulated depreciation ($400,000)
Carrying Amount $500,000
Less: Fair value ($230,000)
Loss on impairment $270,000
Now let Prepare the journal entry
Dec 31,2020
Dr Loss on impairment $270,000
Cr Accumulated depreciation-Equipment $270,000
(To record the impairment)