On July 1, 2015, Karen Company purchased equipment for \(\$ 325,000\); the estimated useful life was 10 years and the expected salvage value was \(\$ 40,000\). Straight-line depreciation is used. On July 1, 2019, economic factors cause the market value of the equipment to decrease to \(\$ 90,000\). On this date, Karen evaluates if the equipment is impaired and estimates future cash flows relating to the use and disposal of the equipment to be \(\$ 195,000\).

a. Is the equipment impaired at July 1,2019 ? Explain.

b. If the equipment is impaired at July 1,2019 , calculate the amount of the impairment loss.

c. If the equipment is impaired at July 1,2019 , prepare the journal entry to record the impairment loss.