$($Impairment $-$ Cost Recovery and Rational Entity Models$)$ The information that follows relates to equipment owned by Gaurav limited on December $31,2020$:CostAccumulated depreciation to date$$10,000,000)$Expected Future net cash flows $($undiscounted$)$ ASPE$2,000,0007,000,000$Expected future net cash flows $($discounted$,$ value in use$)1$F$56,350,000$Fair ValueCost to sell $($costs of disposal$)6,200,00050,000-$ Only $+725.$usedAssume that Gaurav will continue to use this asset in the future. As of December $31,2020,$ the equipment has a remaining useful life of four years. Gaurav uses straight $-$ line method of depreciation.nstructions:Assume that Gaurav is a private company that follows ASPE$\mathrm{.}1.$ Prepare the journal entry on December $31,2020$ to record asset impairment, if any$\mathrm{.}2.$ Prepare the journal entry to record depreciation expense for $2021\mathrm{.}3.$ The equipment's fair value at December $31,2021$ is $$6\mathrm{.}5$ million. Prepare the journal entry, if any, to record the increase in fair value.