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Oriole Company uses special strapping equipment in its packaging business. The equipment was purchased in...

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Accounting

Oriole Company uses special strapping equipment in its packaging business. The equipment was purchased in January 2016 for $ 11,800,000 and had an estimated useful life of 8 years with no salvage value. At December 31, 2017, new technology was introduced that would accelerate the obsolescence of Orioles equipment. Orioles controller estimates that expected future net cash flows on the equipment will be $ 7,434,000 and that the fair value of the equipment is $ 6,608,000. Oriole intends to continue using the equipment, but it is estimated that the remaining useful life is 4 years. Oriole uses straight-line depreciation.

-Prepare the journal entry (if any) to record the impairment at December 31, 2017 and for the equipment at December 31, 2018, assuming that Oriole intends to dispose of the equipment and that it has not been disposed of as of December 31, 2018. (If no entry is required, select "No entry" for the account titles and enter 0 for the amounts. Credit account titles are automatically indented when amount is entered. Do not indent manually.)

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