### Amortization Entries#### InstructionsKleen Company acquired patent rights on January 10 of Year 1 for $2,800,000. The patent has a useful life equal to its legal life of eight years. On January 7 of Year 4, Kleen successfully defended the patent in a lawsuit at a cost of $38,000.##### Required:a. **Determine the patent amortization expense for Year 4 ended December 31.**b. **Journalize the adjusting entry on December 31 of Year 4 to recognize the amortization.** Refer to the chart of accounts for the exact wording of the account titles. CNOW journals do not use lines for journal explanations. Every line on a journal page is used for debit or credit entries. CNOW journals will automatically indent a credit entry when a credit amount is entered.#### Chart of Accounts**CHART OF ACCOUNTS** Kleen Company General Ledger ## Journalizing Adjusting Entries### b. Adjusting Entry for AmortizationTo journalize the adjusting entry on December 31 of Year 4 to recognize the amortization, refer to the chart of accounts for the exact wording of the account titles. Note that our journals do not use lines for journal explanations. Every line on a journal page is used for either debit or credit entries. CNOW journals will automatically indent when a credit amount is entered.### Example Journal Entry#### Date: June 2| DATE | DESCRIPTION | POST. REF. | DEBIT | CREDIT | ASSETS | LIABILITIES ||-------|-------------------------------|------------|-------------|-------------|--------|-------------|| | Adjusting Entries | | | | | || Jun. 2| Amortization Expense-Patents | ✔ | 357,600.00 | | | || | Amortization ExpensE | | | 357,600.00 | | |*Note: The cell labeled "Amortization ExpensE" appears to be flagged with a feedback indicator which suggests an error in typing, likely due to a typo.*### Explanation:1. **Amortization Expense-Patents Account:** - **Debit:** $357,600.00 - This represents the expense incurred over the period due to the amortization of patents.2. **Amortization Expense Account:** - **Credit:** $357,600.00 - This is the corresponding entry that reduces the patent's value in the books.### Key Points:- Ensure to cross-verify the exact titles of accounts with the provided chart of accounts.- Each entry on the journal page must correspond to either a debit or credit.- CNOW journals automatically indent when entering a credit amount, reflecting standard accounting practices.#### How Does Grading Work?- The grading of journal entries will consider the accuracy of account titles, debit and credit amounts, and any potential typographical errors. The current score is 17 out of 25, indicating the need for a proper account title correction.### Summary:Carefully record and review adjusting entries to maintain accurate and compliant financial records. If any feedback or errors appear, address these promptly to ensure precise documentation.

>Intangible assets are the assets that do not have any physical existence and cannot be seen,…

Amortization entries Instructions Chart of Accounts First Question Journal Instructions Kleen Company acquired patent rights on January 10 of Year 1 for $2,800,000. The patent has a useful life equal to its legal life of eight years. On January 7 of Year 4, Kleen successfully defended the patent in a lawsuit at a cost of $38,000. Required: a. Determine the patent amortization expense for Year 4 ended December 31. b. Journalize the adjusting entry on December 31 of Year 4 to recognize the amortization. Refer to the chart of accounts for the exact wording of the account titles. CNOW journals do not use lines for journal explanations. Every line on a journal page is used for debit or credit entries. CNOW journals will automatically indent a credit entry when a credit amount is entered. Chart of Accounts CHART OF ACCOUNTS Kleen Company General Ledger

Amortization entries Instructions Chart of Accounts First Question Journal Instructions Kleen Company acquired patent rights on January 10 of Year 1 for $2,800,000. The patent has a useful life equal to its legal life of eight years. On January 7 of Year 4, Kleen successfully defended the patent in a lawsuit at a cost of $38,000. Required: a. Determine the patent amortization expense for Year 4 ended December 31. b. Journalize the adjusting entry on December 31 of Year 4 to recognize the amortization. Refer to the chart of accounts for the exact wording of the account titles. CNOW journals do not use lines for journal explanations. Every line on a journal page is used for debit or credit entries. CNOW journals will automatically indent a credit entry when a credit amount is entered. Chart of Accounts CHART OF ACCOUNTS Kleen Company General Ledger

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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