Homework SourseAccounting for Intangible Assets and Natural Resources On Ju
Accounting for Intangible Assets and Natural Resources
On June 1, ABC Inc. purchased a patent for $75,000 with a useful life of 10 years. Prepare the journal entry to amortize the patent at the end of the first year assuming ABC Inc. follows a calendar year.
On January 4, ABC Inc. purchased a music distributor\'s collection of lyrics and songs for $425,000. The copyrights are expected to last another 10 years. Prepare the journal entry to amortize the copyright at the end of the first year.
ABC, Inc.
Journal Entries
Date
Account Name
Debit
Credit
1-Jun
a)
4-Jan
b)
| ABC, Inc. | ||||
| Journal Entries | ||||
| Date | Account Name | |||
| Debit | Credit | |||
| 1-Jun | a) | |||
| 4-Jan | b) | |||
Solution
Solution:
| ABC Inc. | |||
| Journal Entries | |||
| Date | Particulars | Debit | Credit |
| 31-Dec | Amortization expense Dr ($75,000/10*6/12) | $3,750.00 | |
| To Accumulated amortization - Patent | $3,750.00 | ||
| (To record amortization of patent) | |||
| 31-Dec | Amortization expense Dr ($425,000/10) | $42,500.00 | |
| To Accumulated amortization - Copyright | $42,500.00 | ||
| (To record amortization of Copyright) |
