As the recently appointed auditor for Novak Corporation, you have been asked to examine selected accounts before the 6-month financial statements of June 30, 2020, are prepared. The controller for Novak Corporation mentions that only one account is kept for intangible assets. The accountis shown below. Intangible Assets Debit Credit Balance Jan. 4 Research and development costs 940,000 940,000 Jan. 5 Legal costs to obtain patent 74,400 1,014,400 Jan. 31 Payment of 7 months' rent on property leased by Novak 91,000 1,105,400 Feb. 11 Premium on common stock 240,000 865,400 March 31 Unamortized bond discount on bonds due March 31, 2040 108,000 973,400 April 30 Promotional expenses related to start-up of business 219,400 1,192,800 June 30 Operating losses for first ó months 253,500 1,446,300 Prepare the entries necessary to correct this account. Assume that the patent has a useful life of 10 years

As the recently appointed auditor for Novak Corporation, you have been asked to examine selected accounts before the 6-month financial statements of June 30, 2020, are prepared. The controller for Novak Corporation mentions that only one account is kept for intangible assets. The accountis shown below. Intangible Assets Debit Credit Balance Jan. 4 Research and development costs 940,000 940,000 Jan. 5 Legal costs to obtain patent 74,400 1,014,400 Jan. 31 Payment of 7 months' rent on property leased by Novak 91,000 1,105,400 Feb. 11 Premium on common stock 240,000 865,400 March 31 Unamortized bond discount on bonds due March 31, 2040 108,000 973,400 April 30 Promotional expenses related to start-up of business 219,400 1,192,800 June 30 Operating losses for first ó months 253,500 1,446,300 Prepare the entries necessary to correct this account. Assume that the patent has a useful life of 10 years

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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