23. Presented below is information related to copyrights owned by Wamser Corporation at December 31, 2008.
Carrying Amount 2400000
Expected Future Net Cash Flows 2100000
Fair Value 1400000
Assume Wamser will continue to use this asset in the future. As of December 31, 2008, the copyrights have a remaining useful life of 5 years.
Directions: Respond to these questions on a separate Excel spreadsheet as directed on the Problem Set 3 directions.
a) Prepare the journal entry (if any) to record the impairment of the asset at December 31, 2008.
b) Prepare the journal entry to record amortization expense for 2009.
c) The fair value of the copyright at December 31, 2009 is $1,500,000. Prepare the journal entry (if any) necessary to record this increase in fair value.
The solution prepares impairment and amortization entries for Wamser Corporation copyrights.