PROBLEM (Recommended Time Allocation: 15 Minutes, 8 Marks) Gethsemane Silos Ltd. (GSL) is a private company that uses ASPE GSL purchased $302,000 of equipment on January 1, 2019. Its accumulated depreciation at December 31, 2020 is $81,200. Though GSL intends to continue using this capital asset, new circumstances at December 31, 2020 suggest that this equipment may be permanently impaired. Future net cash flows from the use of this asset are expected to be $40,000 in 2021, $30,000 in 2022, and $20,000 in 2023. The equipment is expected to have a residual value of $41,000 at the end of its useful life, which is expected to be December 31, 2023. An equipment specialist has determined that the fair value of this equipment at December 31, 2020 is 593,000. GSL depreciates this asset on a straight-line basis. Because GSL uses ASPE, it uses the "Cost Recovery Impairment Model". Required: 1. Determine if the carrying value of the equipment is "recoverable" as of December 31, 2020. Show your work. 2. Prepare the journal entry to record an impairment of the equipment on December 31, 2020