Question

Presented below is information related to copyrights owned by Sheridan Company at December 31, 2020. Cost $8,640,000 Carrying amount 4,270,000 Expected future net cash flows 3,940,000 Fair value 3,360,000 Assume that Sheridan 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. (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 enter an account titleenter an account title enter a debit amountenter a debit amount enter a credit amountenter a credit amount enter an account titleenter an account title enter a debit amountenter a debit amount enter a credit amountenter a credit amount

Answer 1

Answer
No.	Date	Accounts	Debit	Credit
(a)	December 31, 2020	Loss on Impairment	$     9,10,000
		Copyright (4270000 - 3360000)		$     9,10,000
(b)	Year 2021	Amortization expenses	$     3,36,000
		Copyright (3360000 /10 )		$     3,36,000
(c)	No entry will be passed to record increase in the fair value of copyright.
Please Like ( Positive Rating )