The Simon Company Acquired a Long-Lived Asset Three Years Ago $\quad$

The Simon Company acquired a long-lived asset three years ago at a cost of $125,000.Two years later the asset sustained impairment in value.At the time of the impairment the fair value of the asset was $25,000 and the carrying value was $50,000.The entry to record the impairment would be

A) DR Retained earnings $\quad$ 25,000
CR Accumulated depreciation $\quad$ 25,000
B) DR Impairment loss $\quad$ 25,000
CR Long-lived asset $\quad$ 25,000
C) DR Retained earnings $\quad$ 25,000
CR Extraordinary loss $\quad$ 25,000
D) DR Extraordinary loss $\quad$ 25,000
CR Long-lived asset $\quad$ 25,000

Correct Answer:

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