Impairment of Intangibles

An intangible asset cost $300,000 on January 1, 2013. On January 1, 2014, the asset was evaluated to determine whether it was impaired. As of January 1, 2014, the asset was expected to generate future cash flows of $25,000 per year (at the end of the year). The appropriate discount rate is 5%.

1. Give the entries to record amortization in 2013 and any impairment loss in 2014 assuming that as of January 1, 2013, the asset was assumed to have a total useful life of 10 years and that as of January 1, 2014, there were nine years remaining.

Click here to access the PV table to calculate the undiscounted future cash flows and round your answer to the nearest dollar. If no entry is required, select "No entry required" and leave the amount boxes blank. If an amount box does not require an entry, leave it blank.

2. Give the entries to record amortization in 2013 and any impairment loss in 2014 assuming that as of January 1, 2013, the asset was assumed to have an indefinite useful life and that as of January 1, 2014, the remaining life was still indefinite. If no entry is required, select "No entry required" and leave the amount boxes blank. If an amount box does not require an entry, leave it blank.