Question

These are selected 2022 transactions for Flounder Corporation: Jan. 1 Purchased a copyright for $96,000. The copyright has a useful life of 6 years and a remaining legal life of 30 years. Mar. 1 Purchased a patent with an estimated useful life of 4 years and a legal life of 20 years for $39,000. Sept. 1 Purchased a small company and recorded goodwill of $126,000. Its useful life is indefinite.
Prepare all adjusting entries at December 31 to record amortization required by the events.
(Credit account titles are autom entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter 0 for the
Date Account Titles and Explanation Debit Credit
Dec. 31 |Amortization Expense 16000
16000
(To record amortization of Copyrights)
Dec. 31 Amortization Expense
(To record amortization of Patents)
Dec. 31 (To record amortization of Goodwill)

Answer 1

Answer:

amortization expense 16,000 debit

                    copyright             16,000 credit

amortization expense  8,125 debit

                    patent                    8,125 credit

-no entry required-

Explanation:

copyright: 96,000 dollars

over 6 years of useful life: 96,000 / 6 = 16,000

patent: 39,000 over a 4 years year of useful life period

39,000 / 4 = 9,750

From March 1st to December 31th

9,750 x 10/12 = 8,125

goodwill:

we aren't given with any information about the need to check for impairment or information of loss in the goodwill value by providing the acquired company's assets or book value. Thus, we perform no entry for the period.