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Prepare the journal entry to record the impairment

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Reference no: EM132092327

Question - Presented below is information related to copyrights owned by Wamser Corporation at December 31, 2006.

Cost $2,700,000

Carrying amount 2,400,000

Expected future net cash flows 2,100,000

Fair value 1,400,000

Assume Wamser will continue to use this asset in the future. As of December 31, 2006, the copyrights have a remaining useful life of 5 years.

Instructions

(a) Prepare the journal entry (if any) to record the impairment of the asset at December 31, 2006.

(b) Prepare the journal entry to record amortization expense for 2007.

(c) The fair value of the copyright at December 31, 2007 is $1,500,000. Prepare the journal entry (if any) necessary to record this increase in fair value.

Reference no: EM132092327

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