On 1 July 2017, Coronet Ltd acquired and installed an item of machinery for use in its manufacturing business. When acquired, the machinery cost $1 800 000, had an estimated useful life of 10 years. Coronet Ltd depreciates machinery on a straightline basis over its useful life. At 30 June 2019, the machinery had a carrying amount of $1 500 000. At the end of the 2019 reporting period the annual review of all machinery found that this particular item of machinery had incurred significant damage as a result of being rolled down a sand dune. As a result of the damage, the engineering department estimated the fair value less costs of disposal of the machinery at the end of the reporting period was $1 065 000. As the machinery can operate in a limited capacity, it could be expected to provide annual net cash flows of $157 500 for the next 8 years. The expected residual value will remain unchanged. The management of Coronet Ltd uses a discount rate of 8 per cent for calculations of this kind. The present value of an annuity of $1 for 8 years discounted at 8 per cent is 5.7466.

Required:

Evaluate and discuss whether Coronet Ltd has incurred an impairment loss in relation to the asset. If so, determine the amount of the impairment loss, and provide the journal entry necessary to recognise any impairment in the machine. Round figures to the nearest dollar amount.