Answer and Explanation:
As per the data given in the question,
The journal entries are shown below:
A. On the date of transaction
1. Franchise A/c Dr. $400,000
To Cash Cr. $400,000
(Being cash paid is recorded)
2. Research and development expense A/c Dr. $600,000
To Cash Cr. $600,000
(Being cash paid is recorded)
3. Patents A/c Dr. $180,000
To Cash Cr. $180,000
(Being cash paid is recorded)
4. Patents A/c Dr. $140,000
To Cash Cr. $140,000
(Being cash paid is recorded)
5. Legal fees expense A/c Dr. $480,000
To Cash Cr. $480,000
(Being cash paid is recorded)
6. Patents expense A/c Dr. $252,000
To Patents Cr. $252,000
(Being patent expense is recorded)
7. Research and development expense $104,000
To Cash Cr. $104,000
(Being cash paid is recorded)
B. Journal entries on Dec-31, 2018
1. No journal entry is needed
2. No journal entry is needed
3. Amortization expense A/c Dr. $18,000
To Patents Cr. $18,000
(Being the amortization expense is recorded)
4. Amortization expense $35,000 ($140,000 ÷ 4 years)
To Patents Cr. $35,000
(Being the amortization expense is recorded)
5. No journal entry is needed
6. No journal entry is needed
