Sloane, Inc $\begin{array} { l } \text { No entry is necessary as a write-off violates the historical cost principle. }\\ \end{array}$

Sloane, Inc.purchased equipment in 2005 at a cost of $600,000.Two years later it became apparent to Sloane, Inc.that this equipment had suffered an impairment of value.In early 2007, the book value of the asset is $360,000 and it is estimated that the fair value is now only $240,000.The entry to record the impairment is

A) $\begin{array} { l } \text { No entry is necessary as a write-off violates the historical cost principle. }\\ \end{array}$

B) $\begin{array} { l } \text { Retained Earnings }&120,000\\ \text {Accumulated Depreciation-Equipment }&&120,000\\ \end{array}$

C) $\begin{array} { l }\text { Loss on Impairment of Equipment }&120,000\\ \text {Accumulated Depreciation-Equipment }&&120,000\\ \end{array}$

D) $\begin{array} { l }\text { Retained Earnings }&120,000\\ \text { Reserve for Loss on Impairment of Equipment.. }&&120,000\\\end{array}$