Presented below is information related to copyrights owned by Taylor Corporation at
December 31, 2020.
Carrying amount     7,000,000
Expected future net cash flows   6,200,000
Fair value    3,300,000
Assume Taylor will continue to use this asset in the future. As of December 31, 2020,
the copyrights have a remaining useful life of 5 years.
Instructions
(a) Prepare the journal entry (if any) to record the impairment of the asset at
December 31, 2020.
(b) Prepare the journal entry to record amortization expense for 2021.
(c) The fair value of the copyright at December 31, 2021 is $3,400,000. Prepare the
journal entry, under GAAP, necessary to record this increase in fair value.