Presented below is information related to copyrights owned by Wamser Corporation at December 31, 2014. Cost $2,700,000 Carrying amount 2,350,000 Recoverable amount 1,500,000 Assume Wamser will continue to use this asset in the future. As of December 31, 2014, the copyrights have a remaining useful life of 5 years. Instructions (a) Prepare the journal entry (if any) to record the impairment of the asset at December 31, 2014. (b) Prepare the journal entry to record amortization expense for 2015. (c) The recoverable amount of the copyright at December 31, 2015 is $1,600,000. Prepare the journal entry necessary to record this increase in fair value.

Cornerstones of Financial Accounting
4th Edition
ISBN:9781337690881
Author:Jay Rich, Jeff Jones
Publisher:Jay Rich, Jeff Jones
Chapter7: Operating Assets
Section: Chapter Questions
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Presented below is information related to copyrights owned by Wamser Corporation at
December 31, 2014.

Cost $2,700,000
Carrying amount 2,350,000
Recoverable amount 1,500,000

Assume Wamser will continue to use this asset in the future. As of December 31, 2014, the
copyrights have a remaining useful life of 5 years.

Instructions
(a) Prepare the journal entry (if any) to record the impairment of the asset at December 31,
2014.
(b) Prepare the journal entry to record amortization expense for 2015.
(c) The recoverable amount of the copyright at December 31, 2015 is $1,600,000. Prepare the
journal entry necessary to record this increase in fair value.

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