Question

Presented below is information related to copyrights owned by Crane Company at December 31, 2020.

Cost		$8,530,000
Carrying amount		4,260,000
Expected future net cash flows		3,930,000
Fair value		3,580,000

Assume that Crane Company will continue to use this copyright in the future. As of December 31, 2020, the copyright is estimated to have a remaining useful life of 10 years.

a: Prepare the journal entry to record the impairment of the asset at December 31, 2020. The company does not use accumulated amortization accounts.

b:Prepare the journal entry to record amortization expense for 2021 related to the copyrights.

c: The fair value of the copyright at December 31, 2021, is $3,700,000. Prepare the journal entry necessary to record the increase in fair value.

Answer 1

Anaur Ca) Joumal Entry for Empairment of Cotyriat LF Debit partiulars Du 31LOSS on Impoiment TO Copyright 42.601000-3,580,00) credat Dale 680,000 AIc dr 9020 oo0'089 (b)Journol Entry or t5e Amortigation of Copyright LF Debit $358,000 credit Parti culorg Amortigalion apense Ale d TO Copy Y1ght 3,580,000/10 yeavs) Dali 2021 358, 000 No Journal Enly will Le paed to reusd increaye in 15e daiv value sCapyright