Question
The following information is for a copyright owned by Flounder Corp., a private entity, at December 31, 2020. Flounder Corp. applies ASPE. Cost$4,305,000Carrying amount2,149,000Expected future
The following information is for a copyright owned by Flounder Corp., a private entity, at December 31, 2020. Flounder Corp. applies ASPE.
Cost$4,305,000Carrying amount2,149,000Expected future net cash flows (undiscounted)2,014,000Fair value1,671,000
Assume that Flounder Corp. will continue to use this copyright in the future. As at December 31, 2020, the copyright is estimated to have a remaining useful life of 8 years.
1)Prepare the journal entry, if any, to record the asset's impairment at December 31, 2020.
2)Prepare the journal entry to record amortization expense for 2021 related to the copyright.
3)The copyright's fair value at December 31, 2021, is $2.4million. Prepare the journal entry, if any, to record the increase in fair value.
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