On January 2. 2018, David Corporation purchased a patent for $525.000. The remai

Question

On January 2. 2018, David Corporation purchased a patent for $525.000. The remaining legal life is 10 years: but the company estimated that the patent will be useful only for six years. In January 2020, the company incurred legal fees of $50,000 in successfully defending a patent infringement suit. The successful defense did not change the company's estimate of useful life. Required: Prepare journal entries related to the patent for 2018, 2019, and 2020. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.) View transaction list Journal entry worksheet Record the purchase of the patent. Note: Enter debits before credits. Date General Journal Debit Credit January 02, 2018

Explanation / Answer

Jan-2-18 Patent 525000      Cash 525000 Dec-31-18 Amortization expense 87500 =525000/6       Patent 87500 Dec-31-19 Amortization expense 87500       Patent 87500 Jan-20 Patent 50000      Cash 50000 Dec-31-20 Amortization expense 100000 =(525000+50000-87500-87500)/4       Patent 100000

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