Ireland Corporation purchased copyrights on January 1, 2019, for $6,000,000. At the end of 2022, the copyrights had a fa

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Ireland Corporation purchased copyrights on January 1, 2019, for
$6,000,000. At the end of 2022, the copyrights had a fair value of
$3,200,000 and were being carried at $5,200,000. The copyrights are
expected to generate $4,700,000 of future net cash flows and have a
remaining useful life of 5 years as of 12/31/2022. Ireland will
continue to use the copyrights in the future.
On February 1, 2022, Ireland paid $3,500,000 to acquire all of
the common stock of Shamrock Corporation, which became a division
of Ireland. At the time of the acquisition, Shamrock’s balance
sheet reported $3.6 million of total assets and $1.1 million of
total liabilities. At the date of the purchase, it was determined
that the fair value of Shamrock’s identifiable net assets was $3.1
million. On December 31, 2022, Shamrock’s balance sheet reported
$800,000 of current assets, $2.4 million of noncurrent assets
(including any Goodwill recognized in purchase), and $1.2 million
of total liabilities. The fair value of the Shamrock division on
December 31, 2022, is determined to be $1,950,000.
Required
1. Prepare the journal entry to record amortization
expense on the copyrights for 2023. Journal entry
description is required.
2. The fair value of the copyrights at December 31, 2023 are
$2,500,000. Prepare the journal entry (if any) to record the
increase in fair value.
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