Prepare entries to set up appropriate accounts for different intangibles, amorti
ID: 2576405 • Letter: P
Question
Prepare entries to set up appropriate accounts for different intangibles, amortize intangible assets. Lake Company, organized in 2019, has the following transactions related to intangible assets. 1/2/2019 Purchased patent (8 year life) $560,000 4/1/19 Goodwill purchased (indefinite life) 360,000 7/1/19 10-year franchise; expiration date 7/1/2029 440,000 9/1/19 Research and development costs 185,000 Instructions: Prepare the necessary entries to record these intangibles. All costs incurred were for cash. Make the adjusting entries as of December 31, 2019, recording any necessary amortization and reflecting all balances accurately as of that date. Create a General Journal reflecting Debit and Credit columns.Explanation / Answer
Date Accounts Title Dr Cr 1/2/2019 Patents $560,000 Cash $560,000 4/1/2019 Goodwill $360,000 Cash $360,000 7/1/2019 Franchise Fees $440,000 Cash $440,000 9/1/2019 Research & Development expenses $185,000 Cash $185,000 12/31/2019 Amortization Expenses-patent 70000 Accumulated Amortization-Patent/ Patent 70000 (560000/8) 12/31/2019 Amortization Expenses-Franchisee 22000 Franchisee Fees 22000 (440000/10)*6/12 If any doubt please comemnt