Question

Exercise 12-13 Presented below is information related to copyrights owned by Sunland Company at December 31, 2017. Cost $8,540,000 Carrying amount 4,310,000 Expected future net cash flows 3,910,000 Fair value 3,330,000 Assume that Sunland Company will continue to use this copyright in the future. As of December 31, 2017, the copyright is estimated to have a remaining useful life of 10 years. Prepare the journal entry to record the impairment of the asset at December 31, 2017. The company does not use accumulated amortization accounts. (If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts. Credit account titles are automatically indented when amount is entered. Do not indent manually.) Account Titles and Explanation Debit Credit SHOW LIST OF ACCOUNTS LINK TO TEXT Prepare the journal entry to record amortization expense for 2018 related to the copyrights. (If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts. Credit account titles are automatically indented when amount is entered. Do not indent manually.) Account Titles and Explanation Debit Credit SHOW LIST OF ACCOUNTS LINK TO TEXT The fair value of the copyright at December 31, 2018, is $3,620,000. Prepare the journal entry necessary to record the increase in fair value. (If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts. Credit account titles are automatically indented when amount is entered. Do not indent manually.) Account Titles and Explanation Debit Credit Click if you would like to Show Work for this question: Open Show Work SHOW LIST OF ACCOUNTS LINK TO TEXT

Answer 1

https://www.coursehero.com/file/p42mfrs/b-Amortization-Expense-1500-Trademarks-15000-3000-X-14-X-612-1500-EXERCISE-12/

https://www.coursehero.com/file/p777cqv/2-The-impairment-loss-is-the-amount-by-which-the-carrying-amount-of-the-asset/

https://www.coursehero.com/file/15610809/12-13/

Part A

Account titles and explanation	debit	Credit
Loss on Impairment	980000
Copyrights		980000

Carrying amount	4,310,000
Fair value	3,330,000
Loss on Impairment	980000

Part B

Account titles and explanation	debit	Credit
Amortization expense	333000
Copyrights		333000

New carrying amount	3,330,000
Useful life	10 years
Amortization expense	333000

Part C

Here No entry is required. Restoration related to impairment loss is not allowed for assets held for use.

Account titles and explanation	debit	Credit
No entry	0
No entry		0