Riverbed Corporation purchases a patent from Cullumber Company on January 1, 2020, for $47,000. The patent has a remaining legal life of 16 years. Riverbed feels the patent will be useful for 10 years. Assume that at January 1, 2022, the carrying amount of the patent on Riverbed's books is $37.600. In January, Riverbed spends $38,400 successfully defendinga patent suit. Riverbed still feels the patent will be useful until the end of 2029. Prepare the journal entries to record the $38,400 expenditure and 2022 amortization. (Credit account titles are automatically indented when amaunt is enitered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter O for the amounts.) Account Titles and Explanation Debit Credit (To record expenditure of patents) (To record amortization expense)
Riverbed Corporation purchases a patent from Cullumber Company on January 1, 2020, for $47,000. The patent has a remaining legal life of 16 years. Riverbed feels the patent will be useful for 10 years. Assume that at January 1, 2022, the carrying amount of the patent on Riverbed's books is $37.600. In January, Riverbed spends $38,400 successfully defendinga patent suit. Riverbed still feels the patent will be useful until the end of 2029. Prepare the journal entries to record the $38,400 expenditure and 2022 amortization. (Credit account titles are automatically indented when amaunt is enitered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter O for the amounts.) Account Titles and Explanation Debit Credit (To record expenditure of patents) (To record amortization expense)
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
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Transcribed Image Text:Riverbed Corporation purchases a patent from Cullumber Company on January 1, 2020, for $47,000. The patent has a remaining legal life of 16 years. Riverbed feels the patent will be
useful for 10 years. Assume that at January 1, 2022, the carrying amount of the patent on Riverbed's books is $37.600. In January, Riverbed spends $38,400 successfully defendinga patent
suit. Riverbed still feels the patent will be useful until the end of 2029.
Prepare the journal entries to record the $38,400 expenditure and 2022 amortization. (Credit account titles are automatically indented when amaunt is enitered. Do not indent manually. If no
entry is required, select "No Entry" for the account titles and enter O for the amounts.)
Account Titles and Explanation
Debit
Credit
(To record expenditure of patents)
(To record amortization expense)
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