Requirements 1. Assuming the straight-line method of amortization, make journal entries to record (a) the purchase of the patent and (b) amortization for the first full year. 2. After using the patent for five years, MP learns at an industry trade show that another company is designing a more efficient printer. On the basis of this new information, MP decides, starting with Year 6, to amortize the remaining cost of the patent over two remaining years, giving the patent a total useful life of seven years. Record amortization for Year 6.
Requirements 1. Assuming the straight-line method of amortization, make journal entries to record (a) the purchase of the patent and (b) amortization for the first full year. 2. After using the patent for five years, MP learns at an industry trade show that another company is designing a more efficient printer. On the basis of this new information, MP decides, starting with Year 6, to amortize the remaining cost of the patent over two remaining years, giving the patent a total useful life of seven years. Record amortization for Year 6.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
Related questions
Question
4rr.
(MP) manufactures printers. Assume that MP recently paid 400,000 for a patent on a new laser printer. Although it gives legal protection for 20 years, the patent is expected to provide a competitive advantage for only ten years.
![Requirement 1. Assuming the straight-Inc method of amortization, make journal entries to record (a) the purchase of the patent and (b) amortization for the first full year. (Record debits first, then credits. Select the
explanation on the last line of the joumal entry table.)
(a) Record the purchase of the patent.
Data
Data
Patent
13
Croch
To record purchase of patent
(b) Record the amortization for the first full year.
Accounts and Explanation
Accounts and Explanation
Amortization Expense Patent
Part
To record amortization of patent
Accounts and Explanation
Amortization Expense-Patent
Patent
Debit
To recara amortization of patent
400,000
Debit
40,000
Credit
Requirement 2. After using the petent for five years, MP leams at an industry trade show that another company is designing a more efficient printer. On the basis of this new information. MP decides, starting with Year
6, to amortize the remaining cost of the patent over two remaining years, giving the patent a total useful te of seven years. Record amortization for Year 5. (Record debits first, then credits. Select the explanation on
the last line of the journal entry table.)
Dalk
Debit
400,000
Credit
40,000
Credit](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2Ff324b481-b878-4b39-8e9a-8990284a9b84%2Faa94927c-4e7d-47cd-8873-b19e77945282%2Flfw8eqs_processed.jpeg&w=3840&q=75)
Transcribed Image Text:Requirement 1. Assuming the straight-Inc method of amortization, make journal entries to record (a) the purchase of the patent and (b) amortization for the first full year. (Record debits first, then credits. Select the
explanation on the last line of the joumal entry table.)
(a) Record the purchase of the patent.
Data
Data
Patent
13
Croch
To record purchase of patent
(b) Record the amortization for the first full year.
Accounts and Explanation
Accounts and Explanation
Amortization Expense Patent
Part
To record amortization of patent
Accounts and Explanation
Amortization Expense-Patent
Patent
Debit
To recara amortization of patent
400,000
Debit
40,000
Credit
Requirement 2. After using the petent for five years, MP leams at an industry trade show that another company is designing a more efficient printer. On the basis of this new information. MP decides, starting with Year
6, to amortize the remaining cost of the patent over two remaining years, giving the patent a total useful te of seven years. Record amortization for Year 5. (Record debits first, then credits. Select the explanation on
the last line of the journal entry table.)
Dalk
Debit
400,000
Credit
40,000
Credit
![Requirements
I
2.
1. Assuming the straight-line method of amortization, make journal entries to
record (a) the purchase of the patent and (b) amortization for the first full year.
After using the patent for five years, MP learns at an industry trade show that
another company is designing a more efficient printer. On the basis of this
new information, MP decides, starting with Year 6, to amortize the remaining
cost of the patent over two remaining years, giving the patent a total useful life
of seven years. Record amortization for Year 6.](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2Ff324b481-b878-4b39-8e9a-8990284a9b84%2Faa94927c-4e7d-47cd-8873-b19e77945282%2Fnkl8dn9_processed.png&w=3840&q=75)
Transcribed Image Text:Requirements
I
2.
1. Assuming the straight-line method of amortization, make journal entries to
record (a) the purchase of the patent and (b) amortization for the first full year.
After using the patent for five years, MP learns at an industry trade show that
another company is designing a more efficient printer. On the basis of this
new information, MP decides, starting with Year 6, to amortize the remaining
cost of the patent over two remaining years, giving the patent a total useful life
of seven years. Record amortization for Year 6.
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