Conrad Inc. purchased a patent for $1,000,000 for a specialty line of patented switch plate covers and outlet plate covers specifically designed to light up automatically when the power fails. Assume the switch plate patent was purchased January 1, 2020, and it is being depreciated over a period of ten years. Assume that Conrad Inc. does not use an accumulated amortization account but instead charges amortization directly against the intangible asset account. 3. After a year of unsuccessful attempts to manufacture the switch plate covers, Conrad Inc. determined the patent was significantly impaired and its book value on January 1, 2020, was written off. Prepare the journal entry to record the impairment. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.)

Conrad Inc. purchased a patent for $1,000,000 for a specialty line of patented switch plate covers and outlet plate covers specifically designed to light up automatically when the power fails. Assume the switch plate patent was purchased January 1, 2020, and it is being depreciated over a period of ten years. Assume that Conrad Inc. does not use an accumulated amortization account but instead charges amortization directly against the intangible asset account. 3. After a year of unsuccessful attempts to manufacture the switch plate covers, Conrad Inc. determined the patent was significantly impaired and its book value on January 1, 2020, was written off. Prepare the journal entry to record the impairment. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.)

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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