How much is the carrying value of the airport land rights

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The airport land rights were given to Delta Air Lines on June. 30,2020. On that date, the rights were valued at 12,000,000. The agreement gives the entity 30 years over those rights. The entity incurred equipment rearrangement costs as result of these rights. As of Dec. 31, 2020, the fair value of the rights significantly declined to 7,000,000 but Delta Air Lines sees an acceptable level of profits in the coming years.

Problem 1: If the asset was recorded at fair value, how much is the carrying value of the airport land rights as of December 31, 2020? Solutions must be in good accounting form.

Reference no: EM132888811

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