Pharoah Corporation has the following selected transactions during the year ended December 31, 2024: Jan. Mar. Sept. 1 1 1 Dec. 31 Purchased a copyright for $128,160 cash. The copyright has a useful life of six years and a remaining legal life of 30 years. Acquired a franchise with a contract period of nine years for $548,910; the expiration date is March 1, 2033. Paid cash of $41,980 and borrowed the remainder from the bank. Purchased a trademark with an indefinite life for $74,360 cash. As the purchase was being finalized, spent $36,630 cash in legal fees to successfully defend the trademark in court. Purchased an advertising agency for $634,000 cash. The agency's only assets reported on its statement of financial position immediately before the purchase were accounts receivable of $56,500, furniture of $167,000, and leasehold improvements of $314,000. Pharoah hired an independent appraiser who estimated that the fair value of these assets was accounts receivable $56,500, furniture $177,000, and leasehold improvements $333,000. Pharoah is not assuming any liabilities pertaining to the agency. Prepare the entries to record any amortization at December 31, assuming Pharoah records adjusting entries annually. (List all debit entries before credit entries. Credit account titles are automatically indented when the amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter O for the amounts.)
Pharoah Corporation has the following selected transactions during the year ended December 31, 2024: Jan. Mar. Sept. 1 1 1 Dec. 31 Purchased a copyright for $128,160 cash. The copyright has a useful life of six years and a remaining legal life of 30 years. Acquired a franchise with a contract period of nine years for $548,910; the expiration date is March 1, 2033. Paid cash of $41,980 and borrowed the remainder from the bank. Purchased a trademark with an indefinite life for $74,360 cash. As the purchase was being finalized, spent $36,630 cash in legal fees to successfully defend the trademark in court. Purchased an advertising agency for $634,000 cash. The agency's only assets reported on its statement of financial position immediately before the purchase were accounts receivable of $56,500, furniture of $167,000, and leasehold improvements of $314,000. Pharoah hired an independent appraiser who estimated that the fair value of these assets was accounts receivable $56,500, furniture $177,000, and leasehold improvements $333,000. Pharoah is not assuming any liabilities pertaining to the agency. Prepare the entries to record any amortization at December 31, assuming Pharoah records adjusting entries annually. (List all debit entries before credit entries. Credit account titles are automatically indented when the amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter O for the amounts.)
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Transcribed Image Text:Pharoah Corporation has the following selected transactions during the year ended December 31, 2024:
Jan.
Mar.
Sept.
1
1
1
Dec. 31
Purchased a copyright for $128,160 cash. The copyright has a useful life of six years and a remaining legal life of 30
years.
Dec. 31
Acquired a franchise with a contract period of nine years for $548,910; the expiration date is March 1, 2033. Paid
cash of $41,980 and borrowed the remainder from the bank.
Dec. 31
Purchased a trademark with an indefinite life for $74,360 cash. As the purchase was being finalized, spent $36,630
cash in legal fees to successfully defend the trademark in court.
Prepare the entries to record any amortization at December 31, assuming Pharoah records adjusting entries annually. (List all
debit entries before credit entries. Credit account titles are automatically indented when the amount is entered. Do not indent manually. If
no entry is required, select "No Entry" for the account titles and enter O for the amounts.)
Purchased an advertising agency for $634,000 cash. The agency's only assets reported on its statement of financial
position immediately before the purchase were accounts receivable of $56,500, furniture of $167,000, and
leasehold improvements of $314,000. Pharoah hired an independent appraiser who estimated that the fair value
of these assets was accounts receivable $56,500, furniture $177,000, and leasehold improvements $333,000.
Pharoah is not assuming any liabilities pertaining to the agency.
Date Account Titles and Explanation
(To record amortization expense on copyrights)
Debit
Credit
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