(Recording and Amortization of Intangibles) Parrish Company, organized in 2019, has set up a single account for all intangible assets. The following summary discloses the debit entries that have been recorded during 2020: 1/2/20 Purchased patent (8-year life) $ 625,000 4/1/20 Purchased goodwill (indefinite life) 540,000 7/1/20 Purchased franchise with 10-year life; expiration date 7/1/30 675,000 8/1/20 Payment for copyright (5-year life) 246,000 9/1/20 Research and development costs 342,500 $2,428,500 Instructions Prepare the necessary entries to clear the Intangible Assets account and to set up separate accounts for distinct types of intangibles. Make the entries as of December 31, 2020, recording any necessary amortization and reflecting all balances accurately as of that date. (Use straight-line amortization.)
(Recording and Amortization of Intangibles) Parrish Company, organized in 2019, has set up a single account for all intangible assets. The following summary discloses the debit entries that have been recorded during 2020:
|
1/2/20 |
Purchased patent (8-year life) |
$ 625,000 |
|
4/1/20 |
Purchased |
540,000 |
|
7/1/20 |
Purchased franchise with 10-year life; expiration date 7/1/30 |
675,000 |
|
8/1/20 |
Payment for copyright (5-year life) |
246,000 |
|
9/1/20 |
Research and development costs |
342,500 |
|
|
|
$2,428,500 |
Instructions
Prepare the necessary entries to clear the Intangible Assets account and to set up separate accounts for distinct types of intangibles. Make the entries as of December 31, 2020, recording any necessary amortization and reflecting all balances accurately as of that date. (Use straight-line amortization.)
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