On January 1, 2020, Russell Company purchased a copyright for $2,000,000, having an estimated useful life of 16 years and no salvage value. On October 15, 2020, Russell paid $200,000 legal fees in an unsuccessful infringement lawsuit of the copyright. On March 10, 2021, Russell paid $300,000 for legal fees in a successful defense of the copyright. This defense does not change the useful life of the copyright. On December 31, 2021, it is estimated that the undiscounted sum of future cash flows associated with the copyright is $1,700,000 and its fair value is $1,450,000. Russell uses the straight-line method for amortization of all intangible assets. Instructions Write all the journal entries related with the copyright during these two years. Be sure to show all calculations and round to the nearest dollar. Russell's fiscal year-end is December 31.

On January 1, 2020, Russell Company purchased a copyright for $2,000,000, having an estimated useful life of 16 years and no salvage value. On October 15, 2020, Russell paid $200,000 legal fees in an unsuccessful infringement lawsuit of the copyright. On March 10, 2021, Russell paid $300,000 for legal fees in a successful defense of the copyright. This defense does not change the useful life of the copyright. On December 31, 2021, it is estimated that the undiscounted sum of future cash flows associated with the copyright is $1,700,000 and its fair value is $1,450,000. Russell uses the straight-line method for amortization of all intangible assets. Instructions Write all the journal entries related with the copyright during these two years. Be sure to show all calculations and round to the nearest dollar. Russell's fiscal year-end is December 31.

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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