Celine Dion Corporation purchases a patent from Salmon Company on January 1, 201

Question

Celine Dion Corporation purchases a patent from Salmon Company on January 1, 2012, for $52,060. The patent has a remaining legal life of 16 years. Celine Dion feels the patent will be useful for 10 years. Prepare Celine Dion's journal entries to record the purchase of the patent and 2012 amortization.  

Account/Description Debit Credit           (To record purchase of patent.)           (To record amortization.) Celine Dion Corporation purchases a patent from Salmon Company on January 1, 2012, for $52,060. The patent has a remaining legal life of 16 years. Celine Dion feels the patent will be useful for 10 years. Prepare Celine Dion's journal entries to record the purchase of the patent and 2012 amortization.

Explanation / Answer

Hi,

Please find the answer as follows:

Patent Dr. 52060

Cash Cr. 52060

(To Record Purchase of Patent)

Patent Amortization Expense Dr. (52060*1/10) 5206

Patents Cr. 5206

(To Record Amortization)

Thanks.

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