California Spas Recently Learned That the Value of Its Building

question 245

Multiple Choice

California Spas recently learned that the value of its building required a write-down because of the discovery that it was on an earthquake fault line.The book value of the building was $1,570,000 before the discovery and the fair value was $975,000 after the discovery.Which of the following is the journal entry used to record the asset impairment?

• A) Debit Impairment Loss and credit Accumulated Depreciation for $595,000
• B) Debit Depreciation Expense and credit Building for $595,000
• C) Debit Impairment Loss and credit Building for $595,000
• D) Debit Other Gains and Losses and credit Accumulated Depreciation for $595,000

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