Chapter 10, Problem 10.12BE

(a)

To determine

Journalizing: It is the process of recording the transactions of an organization in a chronological order. Based on these journal entries recorded, the amounts are posted to the relevant ledger accounts.

Accounting rules for journal entries:

• To increase balance of the account: Debit assets, expenses, losses and credit all liabilities, capital, revenue and gains.
• To decrease balance of the account: Credit assets, expenses, losses and debit all liabilities, capital, revenue and gains.

Amortization: Amortization refers to the amount of depreciation expense charged on an intangible asset. Amortization results in the decreased value of an intangible asset.

To Prepare: journal entry for amortization.

(b)

To determine

To Prepare: reporting of patent in balance sheet.