Tamarisk, Inc., spent $53,900 in attorney fees while developing the trade name o

Question

Tamarisk, Inc., spent $53,900 in attorney fees while developing the trade name of its new product, the Mean Bean Machine.

Prepare the journal entries to record the $53,900 expenditure and the first year’s amortization, using an 7-year life. Use the account title "Trade Names". (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 expenditure of trade names)

(To record amortization expense)

Explanation / Answer

Trade names $ 53,900 Cash $ 53,900 (To record expenditure of trade names) Amortization expenses ($53,900/7) $    7,700 Trade names $    7,700 (To record amortization expense)

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