In 2007, Yorkshire Company purchased land and a building at a cost of $700,000, of which $150,000 was allocated to the land and $550,000 was allocated to the building. As of December 31, 2011, the accounting records related to these assets were as follows:
Land . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $150,000
Building . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 550,000
Accumulated Depreciation, Building . . . . . . . . . . . . . . . . . . . . . . . 150,000
On January 1, 2012, it is determined that there is toxic waste under the building and the future cash flows associated with the land and building are less than the recorded total book value for those two assets. The fair value of the land and building together is now only $120,000, of which $50,000 is land and $70,000 is the building. How should this impairment in value be recognized? Make the entry on January 1, 2012, to record the impairment of the land and building.