On January 1, 2018, Weaver Corporation purchased a patent for $267000. The remai

Question

On January 1, 2018, Weaver Corporation purchased a patent for $267000. The remaining legal life is 20 years, but the company estimates the patent will be useful for only six more years. In January 2020, the company incurred legal fees of $87000 in successfully defending a patent infringement suit. The successful defense did not change the company's estimate of useful life. Weaver Corporations year-end is December 31. References Section Break Exercise 7-16 Record amortization expense 0O7-5 Required information 5.00 points Exercise 7-16 Part 1 Required: 1. Record the purchase in 2018: amortization in 2018; amortization in 2019; legal fees in 2020; and amortization in 2020. (If no entry is required for a transaction/event, select No journal entry required" in the first account field.) Journal entry worksheet Record amortization on the patent. Note: Enter Debit December 31, 201

Explanation / Answer

Ans.1 Date General journal Debit Credit 31-Dec-19 Amortization expenses (267000 / 6) 44500 To Patents 44500 Amortization = Cost of patent / Life 267000 / 6 44500 Ans.2 Balance in patent Account   267000 + 87000 - 44500 - 44500 - 66250 198750 2018 Amortization = 267000 / 6 44500 2019 Amortization = 267000 / 6 44500 2020 Amortization = (267000 + 87000 - 44500 - 44500) / 4 66250

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