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Kohlmeier Company operates several restaurants throughout the Midwest. Three of the restaurants located in the...

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Accounting

Kohlmeier Company operates several restaurants throughout the Midwest. Three of the restaurants located in the center of a large urban area have experienced declining profits due to declining population. The companys management has decided to test the assets of the restaurants for possible impairment. Kohlmeier Company originally purchased the assets for $10 million. The assets have been depreciated by 35% at the time the company decides to test for impairment.

Estimated Undiscounted Future Cash Flows: $4 million

Fair Value: $3.5 million

Prepare the journal entry to record impairment

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