Presented below is information related to copyrights owned by Carla Vista Compan

Question

Presented below is information related to copyrights owned by Carla Vista Company at December 31, 2017.

Assume that Carla Vista Company will continue to use this copyright in the future. As of December 31, 2017, the copyright is estimated to have a remaining useful life of 10 years.

Prepare the journal entry to record the impairment of the asset at December 31, 2017. The company does not use accumulated amortization accounts. (If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts. Credit account titles are automatically indented when amount is entered. Do not indent manually.)

Prepare the journal entry to record amortization expense for 2018 related to the copyrights. (If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts. Credit account titles are automatically indented when amount is entered. Do not indent manually.)

Cost $8,680,000 Carrying amount 4,330,000 Expected future net cash flows 3,980,000 Fair value 3,480,000

Explanation / Answer

Journal Entry Description Debit $ Credit $ Loss on impairement $850,000.00 Copy right $850,000.00 W/Note: Computation of Asset impaired by Carrying amount $4,330,000.00 Fair value $3,480,000.00 Assets is impaired by $850,000.00

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