Presented below is information related to copyrights owned by Fielding Company at December 31, 2020. Cost $9,450,000 Carrying amount 5,850,000 Expected future net cash flows (undiscounted) 5,000,000 Fair value 4,420,000 Assume that Fielding Company will continue to use this copyright in the future. As of December 31, 2020, the copyright is estimated to have a remaining useful life of 8 years. Instructions: 1. Prepare the journal entry (if any) to record the impairment of the asset at December 31, 2020. The company does not use accumulated amortization accounts. 2. Prepare the journal entry to record amortization expense for 2021 related to the copyrights. 3. The fair value of the copyright at December 31, 2021, is $5,800,000. Prepare the journal entry (if any) necessary to record the increase in fair value.
Presented below is information related to copyrights owned by Fielding Company at December 31, 2020. Cost $9,450,000 Carrying amount 5,850,000 Expected future net cash flows (undiscounted) 5,000,000 Fair value 4,420,000 Assume that Fielding Company will continue to use this copyright in the future. As of December 31, 2020, the copyright is estimated to have a remaining useful life of 8 years. Instructions: 1. Prepare the journal entry (if any) to record the impairment of the asset at December 31, 2020. The company does not use accumulated amortization accounts. 2. Prepare the journal entry to record amortization expense for 2021 related to the copyrights. 3. The fair value of the copyright at December 31, 2021, is $5,800,000. Prepare the journal entry (if any) necessary to record the increase in fair value.
Cornerstones of Financial Accounting
4th Edition
ISBN:9781337690881
Author:Jay Rich, Jeff Jones
Publisher:Jay Rich, Jeff Jones
Chapter7: Operating Assets
Section: Chapter Questions
Problem 64E
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