Answer:
A.
Impairment of Intangible Assets
Dr Loss on impairment 860,000
Cr Copyrights 860,000
B.
Dr Amortization expense 344,000
Cr Copyrights 344,000
Explanation:
Ivanhoe Company
Impairment of Intangible Assets
Recoverability test: If the sum of the expected future net cash flows is less or lower than the carrying amount of the asset, then an impairment has occurred.
Asset is Impaired
Expected future cash flow$4,180,000
Carrying value $4,300,000
$(120,000)
A.
Impairment of Intangible Assets
Dr Loss on impairment 860,000
Cr Copyrights 860,000
Fair value test:Carrying amount $ 4,300,000
Fair value 3,440,000
Loss on impairment$ (860,000)
B.
Dr Amortization expense 344,000
Cr Copyrights 344,000
Carrying amount$3,440,000
Useful life ÷10 years
Amortization per year$ 344,000
