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Prepare the journal entry to record the impairment

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Question - Presented below is information related to copyright owned by Winsor Corporation at December 31.

Original Cost $3,000,000

Carrying (book) amount 2,650,000

Expected future net cash flows 2,800,000

Fair value 1,600,000

Assume Winsor will continue to use this asset in the future. As of December 31, the copyright has a remaining useful life of 5 years.

Required -

a. Prepare the journal entry (if any) to record the impairment of the asset at December 31 of the current year (amortization expense has already been journalized for the year).

b. Prepare the required adjusting entry(s) for the following year-end to record amortization expense and impairment (if any). (fair value of the copyright at that time is $1,700,000, Expected future net cash flows 2,000,000).

Reference no: EM132795989

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