The Horstmeyer Corporation commenced operations early in 2024. A number of expenditures were made during 2024 that were debited to one account called intangible asset. A recap of the $207,500 balance in this account at the end of 2024 is as follows: Date February 3 March 1 March 15 April 30 June 15 September 30 October 13 Various Transaction State incorporation fees and legal costs related to organizing the corporation Fire insurance premium for three-year period Purchased a copyright Research and development costs Legal fees for filing a patent on a new product resulting from an R&D project Legal fee for successful defense of patent developed above Entered into a 10-year franchise agreement with franchisor Advertising costs Total Amount $ 8,500 7,500 32,000 52,000 3,500 24,000 52,000 28,000 $ 207,500 Required: Prepare the necessary journal entry to clear the intangible asset account and to set up accounts for separate intangible assets, other types of assets, and expenses indicated by the transactions. Note: If no entry is required for a transaction/event, select "No journal entry required" in the first account field.

FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
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The Horstmeyer Corporation commenced operations early in 2024. A number of expenditures were made during 2024 that were
debited to one account called intangible asset. A recap of the $207,500 balance in this account at the end of 2024 is as follows:
Date
February 3
March 1
March 15
April 30
June 15
September 30
October 13
Various
Transaction
State incorporation fees and legal costs related to organizing the corporation
Fire insurance premium for three-year period
Purchased a copyright
Research and development costs
Legal fees for filing a patent on a new product resulting from an R&D project
Legal fee for successful defense of patent developed above
Entered into a 10-year franchise agreement with franchisor
Advertising costs
Total
View transaction list
1
Required:
Prepare the necessary journal entry to clear the intangible asset account and to set up accounts for separate intangible assets, other
types of assets, and expenses indicated by the transactions.
Note: If no entry is required for a transaction/event, select "No journal entry required" in the first account field.
Journal entry worksheet
Record the entry to reclassify various expenditures incorrectly charged to the
intangible asset account.
Note: Enter debits before credits.
Transaction
1
General Journal
Debit
Amount
Credit
$ 8,500
7,500
32,000
52,000
3,500
24,000
52,000
28,000
$ 207,500
Transcribed Image Text:The Horstmeyer Corporation commenced operations early in 2024. A number of expenditures were made during 2024 that were debited to one account called intangible asset. A recap of the $207,500 balance in this account at the end of 2024 is as follows: Date February 3 March 1 March 15 April 30 June 15 September 30 October 13 Various Transaction State incorporation fees and legal costs related to organizing the corporation Fire insurance premium for three-year period Purchased a copyright Research and development costs Legal fees for filing a patent on a new product resulting from an R&D project Legal fee for successful defense of patent developed above Entered into a 10-year franchise agreement with franchisor Advertising costs Total View transaction list 1 Required: Prepare the necessary journal entry to clear the intangible asset account and to set up accounts for separate intangible assets, other types of assets, and expenses indicated by the transactions. Note: If no entry is required for a transaction/event, select "No journal entry required" in the first account field. Journal entry worksheet Record the entry to reclassify various expenditures incorrectly charged to the intangible asset account. Note: Enter debits before credits. Transaction 1 General Journal Debit Amount Credit $ 8,500 7,500 32,000 52,000 3,500 24,000 52,000 28,000 $ 207,500
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