E12.19

Cost $4,300,000

Carrying Amount 2,150,000

Expected future net cash flow 2,000,000

Fair value 1,600,000

Assume that Lighting Designs Corp. 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 10 years.

E12.20

Refer to the information provided in El2.l9, but now assume that Lighting Designs Corp. is a publicly accountable company. At December 31, 2020, the copyright's value in use is $1,850,000 and its selling costs are $100,000. Instructions

a. Prepare the journal entry, if any, to record the asset's impairment at December 31, 2020.

b. Prepare the journal entry to record amortization expense for 2021 related to the copyright.

c. The copyright's fair value at December 31, 2021, is $2.2 million. Prepare the journal entry, if any, to record the increase in fair value.