Byrd Corporation engaged in the following transactions at the beginning of 2019: a. Purchased a Hogburger franchise for a 5-year, $60,000, 10% interest-bearing note. The franchise has an indefinite life providing the terms of the franchise are not violated. b. Sold a trade name for $50,000. The trade name had a carrying value of $5,000. c. Paid an advertising agency $60,000 for advertisements to promote a new trade name. The advertisements will begin in 2020. d. Incurred legal fees of $5,000 to register a new trade name. e. Purchased the copyright to a new movie for $500,000. The movie is made during 2019 at a cost of $15 million. It will begin showing in 2020 and is expected to gross $10 million during 2020, $20 million during 2021, and $10 million during 2022. Required: 1. Prepare journal entries to record the preceding transactions, including any appropriate adjusting entries for 2019. 2. Next Level With regard to the copyright in Transaction e, what factors should Byrd consider in selecting an amortization method?
Byrd Corporation engaged in the following transactions at the beginning of 2019: a. Purchased a Hogburger franchise for a 5-year, $60,000, 10% interest-bearing note. The franchise has an indefinite life providing the terms of the franchise are not violated. b. Sold a trade name for $50,000. The trade name had a carrying value of $5,000. c. Paid an advertising agency $60,000 for advertisements to promote a new trade name. The advertisements will begin in 2020. d. Incurred legal fees of $5,000 to register a new trade name. e. Purchased the copyright to a new movie for $500,000. The movie is made during 2019 at a cost of $15 million. It will begin showing in 2020 and is expected to gross $10 million during 2020, $20 million during 2021, and $10 million during 2022. Required: 1. Prepare journal entries to record the preceding transactions, including any appropriate adjusting entries for 2019. 2. Next Level With regard to the copyright in Transaction e, what factors should Byrd consider in selecting an amortization method?
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Byrd Corporation engaged in the following transactions at the beginning of 2019:
| a. | Purchased a Hogburger franchise for a 5-year, $60,000, 10% interest-bearing note. The franchise has an indefinite life providing the terms of the franchise are not violated. |
| b. | Sold a trade name for $50,000. The trade name had a carrying value of $5,000. |
| c. | Paid an advertising agency $60,000 for advertisements to promote a new trade name. The advertisements will begin in 2020. |
| d. | Incurred legal fees of $5,000 to register a new trade name. |
| e. | Purchased the copyright to a new movie for $500,000. The movie is made during 2019 at a cost of $15 million. It will begin showing in 2020 and is expected to gross $10 million during 2020, $20 million during 2021, and $10 million during 2022. |
Required:
| 1. | Prepare |
| 2. | Next Level With regard to the copyright in Transaction e, what factors should Byrd consider in selecting an amortization method? |
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