Bramble Corporation obtained a franchise from Sonic Hedgehog Inc. for a cash pay
ID: 2583180 • Letter: B
Question
Bramble Corporation obtained a franchise from Sonic Hedgehog Inc. for a cash payment of $67,200 on April 1, 2017. The franchise grants Bramble the right to sell certain products and services for a period of 6 years.
Prepare Bramble’s April 1 journal entry and December 31 adjusting entry. (Credit account titles are automatically indented when amount is entered. Do not indent manually. Record journal entries in the order presented in the problem. If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts.)
Date
Account Titles and Explanation
Debit
Credit
Date
Account Titles and Explanation
Debit
Credit
Apr. 1Dec. 31
Apr. 1Dec. 31
Explanation / Answer
Solution:
Capitalize = debit
Franchises 67200
Cash 67200
Amortization Expense 8400
Franchises 8400
Explanation:
67200/6yrs x 9 months = 8400