On January 2, 2018, David Corporation purchased a patent for $500,000. The remaining legal life is 12 years, butthe company estimated that the patent will be useful only for eight years. In January 2020, the company incurredlegal fees of $45,000 in successfully defending a patent infringement suit. The successful defense did not changethe company’s estimate of useful life.Required:Prepare journal entries related to the patent for 2018, 2019, and 2020.
On January 2, 2018, David Corporation purchased a patent for $500,000. The remaining legal life is 12 years, butthe company estimated that the patent will be useful only for eight years. In January 2020, the company incurredlegal fees of $45,000 in successfully defending a patent infringement suit. The successful defense did not changethe company’s estimate of useful life.Required:Prepare journal entries related to the patent for 2018, 2019, and 2020.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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On January 2, 2018, David Corporation purchased a patent for $500,000. The remaining legal life is 12 years, but
the company estimated that the patent will be useful only for eight years. In January 2020, the company incurred
legal fees of $45,000 in successfully defending a patent infringement suit. The successful defense did not change
the company’s estimate of useful life.
Required:
Prepare
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