Question

In 2018, Bratten Fitness Company made the following cash purchases:

Answer 1

Answer:

Date           Particular                                         DR                          CR

a.               Patent                                               $214,500

                  Cash                                                                            214,500

          Being total payment for the exclusive right

to produce X-core machine

b.              Brand name                                        260,000

               Exercise Equipment                             403,000

                 cash                                                                       663,000

Being the payment for the brand name of Silver Gym

and exercise equipment  

c.            Copyright                                                  22,000

               Cash                                                                          22,000

Being the payment for the exclusive right to sell Healthy book

Explanation:

there is no journal enrty for the amount to be paid to Silver Gym on a monthly basis when the sales begin because the money has not been paid.