Question 2 (4 points) Presented below is information related to a copyright owned by Mare Company at December 31, 2020.

Cost $8,600,000

Carrying amount 4,300,000

Expected future net cash flows 4,000,000

Fair value 3,200,000

Assume that Mare 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.

1. Is there an impairment loss on the copyright? Why?

2. How much is the impairment loss on the copyright?

3. Prepare the journal entry to record the impairment loss on the copyright at December 31, 2020. The company does not use accumulated amortization accounts.

	Debit	Credit