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Question
For each of the following unrelated transactions, (a) determine the amount of the amortization for the current year, and (b) present the adjusting entries required to record amortization at year end.
(1) Costs (it was not acquired) of $30,000 were incurred on January 1 to obtain a patent. On January 31, $38,610 was spent in legal costs to successfully defend the patent against competitors. The patent has an estimated legal life of 12 years.
(2) A company acquired a copyright for $140,000. The copyright has a useful life of 50 years.
Answer
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