On 1 January 2021, Ted Ltd acquired all the assets and liabilities of Mosby Ltd. Mosby Ltd has a number of operating divisions, including one whose major industry is the manufacture of toy trains, particularly models of trains of historical significance. The toy trains division is regarded as a CGU. In paying \($2\) million for the net assets of Mosby Ltd, Ted Ltd calculated that it had acquired goodwill of \($360\) 000. The goodwill was allocated to each of the divisions, and the assets and liabilities acquired measured at fair value at acquisition date.

At 31 December 2023, the carrying amounts of the assets of the toy train division were:

There is a declining interest in toy trains because of the aggressive marketing of computer based toys, so the management of Ted Ltd measured the value in use of the toy train division at 31 December 2023, determining it to be \($712\) 500.

Required

1. Prepare the journal entries to account for the impairment loss at 31 December 2023.

2. Prepare the journal entries as above but now assuming the value in use of the train division at 31 December 2023 was determined to be \($634\) 500.

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Factory Inventories Brand - 'Froggy' Goodwill $375 000 225 000 75 000 75 000