Pronghorn Corporation purchases a patent from Larkspur Inc. on July 1, 2017, for $267,000. The patent has a remaining legal life of 9years. Pronghorn estimates the patent will have a useful life of 4 years, based on expected product innovations in the market.Prepare Pronghorn's journal entries to record the purchase of the patent and 2017 amortization. (Credit account titles are automaticallyindented when amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter O for theamounts.)Account Titles and ExplanationDebitCreditPatentsCash(To record purchase of patents)Amortization ExpensePatents(To record amortization of patents)2670006675026700066750

The patent is amortized over the 4 years, which is the useful life, instead of the legal life.

Answered: Pronghorn Corporation purchases a…

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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