River Cat Ltd started a company to undertake research and development of a new type of Eco River Jet. For this research and development (R & D) it has incurred the following expenditure in June 2020:

Transaction	Amount	Payment status
Obtaining a general understanding of water flow dynamics	$300,000	Paid
Understanding what local customers expect from a River Jet by Ferry operators	$180,000	Incurred
Testing and refining a certain type of River Jet	$540,000	Incurred
Developing and testing a full prototype of the River Jet, to be called the River King.	$1,140,000	Incurred
Marketing of the River Jet	$720,000	Paid

It is expected that there is a large market for the Eco River Jet, which will generate millions of dollars in revenue.

On 1 July 2020 River Cat Ltd acquired Cool Jet Ltd for cash of $11,000,000. At that date, Cool Jets net identifiable assets had a fair value of $11,600,000. The fair value of the net identifiable assets of Cool Jet Ltd are determined as follows:

Customer list	$100,000
Machinery	$2,900,000
Buildings	$3,000,000
Land	$6,000,000
	$12,000,000
Less: Bank loan	$400,000
Net assets	$11,600,000

At the end of the reporting period of 30 June 2021, River Cat Ltd determines that the recoverable amount of the cash-generating unit, which is considered to be Cool Jet Ltd, totals $9,000,000. The carrying amount of the net identifiable assets of Cool Jet Ltd, which excludes goodwill, has not changed since acquisition and is $11,600,000.

REQUIRED:

1. Prepare journal entries for each transaction from a to e above. (5 marks)
2. Calculate the amount for impairment of goodwill as at 30 June 2021. Show all workings. (2 marks)
3. Prepare journal entries to record impairment of goodwill as at 30 June 2021. (1 mark)