Blue Corporation purchases a patent from Crane Company on January 1, 2017, for $

Question

Blue Corporation purchases a patent from Crane Company on January 1, 2017, for $57,000. The patent has a remaining legal life of 14 years. Blue feels the patent will be useful for 10 years.

Prepare Blue’s journal entries to record the purchase of the patent and 2017 amortization. (Credit account titles are automatically indented when amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts.)

Account Titles and Explanation

Debit

Credit

Account Titles and Explanation

Debit

Credit

(To record purchase of patents)

(To record amortization of patents)

Explanation / Answer

Account Titles and Explanation Debit Credit patent 57000 To cash 57000 (To record purchase of patents) Amortisation Expanses (57000/10 years) 5700 patent 5700 (To record amortization of patents)

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