Presented below is information related to copyrights owned by Sunland Company at December 31, 2020.

Cost $8,550,000

Carrying amount 4,480,000

Expected future net cash flows 4,060,000

Fair value 3,590,000

Assume that Sunland Company 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.

Part 1

Prepare the journal entry to record the impairment of the asset at December 31, 2020. 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.)

Account Titles and Explanation

Debit

Credit

Part 2

Prepare the journal entry to record amortization expense for 2021 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.)

Account Titles and Explanation

Debit

Credit

Part 3

The fair value of the copyright at December 31, 2021, is $3,470,000. Prepare the journal entry necessary to record the increase in fair value. (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.)

Account Titles and Explanation

Debit

Credit