Presented below is net asset information related to the Kingbird Division of Santana, Inc.

Kingbird Division

Net Assets

As of December 31, 2020

(in millions)

Cash $51

Accounts receivable 200

Property, plant, and equipment (net) 2,595

Goodwill 201

Less: Notes payable (2,590)

Net assets $457

The purpose of the Kingbird Division is to develop a nuclear-powered aircraft. If successful, traveling delays associated with refueling could be substantially reduced. Many other benefits would also occur. To date, management has not had much success and is deciding whether a write-down at this time is appropriate. Management estimated its future net cash flows from the project to be $405million. Management has also received an offer to purchase the division for $330million (deemed an appropriate fair value). All identifiable assets' and liabilities' book and fair value amounts are the same.

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

Account Titles and Explanation Debit Credit

(a)

(b)

At December 31, 2021, it is estimated that the division's fair value increased to $340million. Prepare the journal entry to record this increase in fair value.

Account Titles and Explanation Debit Credit

(a)

(b)