Brush Company engaged in the following transactions at the beginning of 2019:1. Prepare the journal entries to record the preceding transactions. 2. Prepare the journal entries to record the amortization of intangible assets for 2019, if appropriate. Amortize over the legal life unless a better alternative is indicated. a. Purchased a patent (Patent A) for $70,000 that had originally been filed in January 2013. The purchase was madeto protect another patent (Patent B) that the company had filed for in January 2015 and subsequently received.b. Purchased the rights to a novel by a best-selling novelist in exchange for 10,000 shares of $10 par value com-mon stock selling for $60 per share. The book is expected to sell 1,500,000 copies over the next 3 years withno significant sales of the novel expected beyond 3 years.c. Purchased the franchise to operate a ferry service from the state government for $10,000. A bridge has been plannedto replace the ferry, and the bridge is expected to be completed in 5 years. Brush hopes that the ferry will continue asa tourist attraction, but profits are expected to be only 20% of those earned before the bridge is opened.d. Paid $28,000 of legal costs to successfully defend the patent acquired in Transaction a.e. Paid a race car driver $50,000 to have the Brush Company name prominently displayed on the race car for 2 years.

A journal entry is being used to record any business transaction in a company's accounting records.…

Answered: a. Purchased a patent (Patent A) for…

FINANCIAL ACCOUNTING

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ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

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Brush Company engaged in the following transactions at the beginning of 2019:

1. Prepare the journal entries to record the preceding transactions. 2. Prepare the journal entries to record the amortization of intangible assets for 2019, if appropriate. Amortize over the legal life unless a better alternative is indicated.

a. Purchased a patent (Patent A) for $70,000 that had originally been filed in January 2013. The purchase was made
to protect another patent (Patent B) that the company had filed for in January 2015 and subsequently received.
b. Purchased the rights to a novel by a best-selling novelist in exchange for 10,000 shares of $10 par value com-
mon stock selling for $60 per share. The book is expected to sell 1,500,000 copies over the next 3 years with
no significant sales of the novel expected beyond 3 years.
c. Purchased the franchise to operate a ferry service from the state government for $10,000. A bridge has been planned
to replace the ferry, and the bridge is expected to be completed in 5 years. Brush hopes that the ferry will continue as
a tourist attraction, but profits are expected to be only 20% of those earned before the bridge is opened.
d. Paid $28,000 of legal costs to successfully defend the patent acquired in Transaction a.
e. Paid a race car driver $50,000 to have the Brush Company name prominently displayed on the race car for 2 years.

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