Prepare journal entries related to the patent for 2021, 2022, and 2023
Chapter18: Accounting Periods And Methods
Section: Chapter Questions
Problem 3RP
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Question
On January 2, 2021, David Corporation purchased a patent for $500,000. The remaining legal life is 12 years, but the company estimated that the patent will be useful only for eight years. In January 2023, the company incurred legal fees of $45,000 in successfully defending a patent infringement suit. The successful defense did not change the company’s estimate of useful life.
Required:
Prepare journal entries related to the patent for 2021, 2022, and 2023. (Do not round intermediate calculations. If no entry is required for a transaction/event, select "No
- Record the purchase of the patent.
- Record amortization of the patent for the year 2021.
- Record amortization of the patent for the year 2022.
- Record costs of successfully defending the patent infringement suit.
- Record amortization of the patent for the year 2023.
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