28.1k views
4 votes
Concord Corporation owns a patent that has a carrying amount of $270,000. Concord expects future net cash flows from this patent to total $200,000. The fair value of the patent is $125,000. Prepare Concord’s journal entry to record the loss on impairment

1 Answer

0 votes

Answer:

The carrying amount of $270,000 is greater than fair value $125,000.

To measure the impairment loss, just do:

= Carrying Value - Fair Value

= $270,000 - $125,000

= $145,000

Therefore, the journal entry is as follows:

Loss on impairment A/c Dr. $145,000

To Patent $145,000

(To record the loss on impairment)

User Zolio
by
8.0k points
Welcome to QAmmunity.org, where you can ask questions and receive answers from other members of our community.

9.4m questions

12.2m answers

Categories