Problem 30-4 (AICPA Adapted) Cognac Company reported an impairment loss of P2,000,000 in the income statement for the year ended December 31, 2020 This loss was related to long-lived asset acquired on January 1 2019 with cost of P10,000,000, useful life of 10 years and no residual value. On December 31, 2020, the entity reported the long-lived asset at P6,000,000 which is the fair value less cost of disposal on such date. On December 31, 2021, the entity determined that the fair value less cost of disposal of the impaired long-lived asset had increased to P7,500,000. The straight line depreciation is recorded for the impaired asset. Required: Prepare all indicated journal entries for 2020 and 2021.

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Chapter1: Financial Statements And Business Decisions
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Please answer the required part: Prepare all indicated journal entries for 2020 and 2021. Please answer it with complete solutions and explanations. Thank you

Problem 30-4 (AICPA Adapted)
, Cognac Company reported an impairment loss of P2,000,000 in
the income statement for the year ended December 31, 2020
This loss was related to long-lived asset acquired on January 1
2019 with cost of P10,000,000, useful life of 10 years and no
,
residual value.
On December 31, 2020, the entity reported the long-lived asset
at P6,000,000 which is the fair value less cost of disposal on
such date.
On December 31, 2021, the entity determined that the fair value
less cost of disposal of the impaired long-lived asset had
increased to P7,500,000. The straight line depreciation is
recorded for the impaired asset.
Required:
Prepare all indicated journal entries for 2020 and 2021.
Transcribed Image Text:Problem 30-4 (AICPA Adapted) , Cognac Company reported an impairment loss of P2,000,000 in the income statement for the year ended December 31, 2020 This loss was related to long-lived asset acquired on January 1 2019 with cost of P10,000,000, useful life of 10 years and no , residual value. On December 31, 2020, the entity reported the long-lived asset at P6,000,000 which is the fair value less cost of disposal on such date. On December 31, 2021, the entity determined that the fair value less cost of disposal of the impaired long-lived asset had increased to P7,500,000. The straight line depreciation is recorded for the impaired asset. Required: Prepare all indicated journal entries for 2020 and 2021.
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