Question

Crane 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 (9-year life)
$387,900

4/1/20 Purchase goodwill (indefinite life)
341,000

7/1/20 Purchased franchise with 10-year life; expiration date 7/1/30
421,000

8/1/20 Payment of copyright (5-year life)
145,200

9/1/20 Research and development costs
211,000

$1,506,100




Prepare the necessary entry to clear the Intangible Assets account and to set up separate accounts for distinct types of intangibles. (Credit account titles are automatically indented when amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts.)
Account Titles and Explanation

Debit

Credit

enter an account title


enter a debit amount


enter a credit amount


enter an account title


enter a debit amount


enter a credit amount


enter an account title


enter a debit amount


enter a credit amount


enter an account title


enter a debit amount


enter a credit amount


enter an account title


enter a debit amount


enter a credit amount


enter an account title


enter a debit amount


enter a credit amount





Make the entry as of December 31, 2020, recording any necessary amortization. (Credit account titles are automatically indented when amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts.)
Account Titles and Explanation

Debit

Credit

enter an account title


enter a debit amount


enter a credit amount


enter an account title


enter a debit amount


enter a credit amount


enter an account title


enter a debit amount


enter a credit amount


enter an account title


enter a debit amount


enter a credit amount





Reflect all balances accurately as of December 31, 2020.
Use straight-line amortization
select an intangible asset
FranchisesCopyrightsResearch and development costsPatentsGoodwill

$enter a dollar amount


select an intangible asset
Research and development costsGoodwillFranchisesCopyrightsPatents

$enter a dollar amount


select an intangible asset
FranchisesResearch and development costsPatentsCopyrightsGoodwill

$enter a dollar amount


select an intangible asset
CopyrightsFranchisesResearch and development costsPatentsGoodwill

$enter a dollar amount

Answer 1

Answer:

Prepare the necessary entry to clear the Intangible Assets account and to set up separate accounts for distinct types of intangibles.

• Dr Patents 387,900
•     Cr Intangible assets 387,900

• Dr Goodwill 341,000
•     Cr Intangible assets 341,000

• Dr Franchises 421,000
•     Cr Intangible assets 421,000

   

• Dr Copyright 145,200
•     Cr Intangible assets 145,200

• Dr Research and development expense 211,000
•     Cr Intangible assets 211,000

Make the entry as of December 31, 2020, recording any necessary amortization:

• Dr Patents 387,900
•     Cr Intangible assets 387,900
• Dr Amortization expense 43,100
•     Cr Accumulated amortization - Patents 43,100

• Dr Goodwill 341,000
•     Cr Intangible assets 341,000

• Dr Franchises 421,000
•     Cr Intangible assets 421,000
• Dr Amortization expense 42,100
•     Cr Accumulated amortization - Franchises 43,100

   

• Dr Copyright 145,200
•     Cr Intangible assets 145,200
• Dr Amortization expense 29,040
•     Cr Accumulated amortization - Copyright 29,040

*R&D costs are expenses, they are not amortized.

Reflect all balances accurately as of December 31, 2020.  Use straight-line amortization .

• Patents $344,800
• Goodwill $341,000
• Franchises $378,900
• Copyright $116,160