SAR Research Associates reports the following intangible assets on its December 31 balance sheet:

Intangible Asset	Net Carrying Value	Remaining Life
Franchise	857,000	5 years
Patent	410,000	3 years
Trade Name	3,955,000
Total	5,222,000

It does not use a seperate accumulated amortization account for the intangible assets.

Management provided the following information related to intangible assets it obtained during the current year:

-Franchise: Due to current market conditions, products sold under the franchise have experienced significant sales declines from possible obsolescence.

-Patent: SAR is currently involved in litigation that will determine if the company has the exclusive right to sell the patented product. Legal counsel informed SAR that the value of the patent will likely be reduced.

-Trade name: The company is required to test for impairment of its indefinite-life intangible assets annually.

SAR's cost of capital is 4 %. Management estimates the following future cash flows to be generated over the next five years from the use of its intangible assets:

Future Period	Franchise	Patent	Trade Name
1	360,000	281,000	890,000
2	250,000	92,500	640,000
3	150,000	18,000	690,000
4	46,500		520,000
5	29,000		371,000
Total	835,500	391,500	3,111,000

a.	Compute the impairment loss (if any) for each intangible asset.
b.	Prepare the journal entry necessary to record the impairment loss.
c.	Assuming thatSAR amortizes its finite-life intangible assets using thestraight-line method, with no scrap value, prepare the journal entry to record the annual amortization for the first year subsequent to the impairmentwrite-down.