California Spas Recently Learned That the Value of Its Building

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 building cost $2,000,000 and has a book value of $1,570,000 before the discovery and the fair value was $975,000 after the discovery.Which of the following journal entries will be 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 Accumulated Depreciation and credit Building for $430,000
D) Debit Impairment Loss and credit Accumulated Depreciation for $430,000