Lamar Printing Company determines that a printing press used in its operations has suffered a permanent impairment in value because of technological changes. An entry to record the impairment should

A) recognize an unusual loss for the period.

B) include a credit to the equipment accumulated depreciation account.

C) include a credit to the equipment account.

D) not be made if the equipment is still being used.

Ans.

B) include a credit to the equipment accumulated depreciation account

Here the impairment of assets are happened when the book value is greater than the market value which results decrease in the value of assets. The journal entry for recording impairment loss is

Impairment loss account            Dr

   To Equipment Accumulated depreciation account/ Accumulated impairment and depreciation account

Here the accumulated depreciation account is credited since impairment arises when the market value is less than that of carrying value or book value and there is no need for separate accumulated impairment loss account as it is the writing down of impaired assets.