On October 1 US Apps paid 1476800 to acquire a patent on sof

On October 1, US Apps paid $1,476,800 to acquire a patent on software. US Apps expects the patent to have a useful life of five years Jounalize the entry to record the purchase of the patent on October1 2. Joumalize the entry to record amortization on December 31. Journal Entry Date Accounts Debit Credit Oct 1 Patents 1,476,800 Cash 1,476,800 Requirement 2. Joumalize the entry to record amortization on December 31. debits first, then credits. Ex (Assume no amortization has been recorded on the patent through December 31. Rcord from any jounal entries.) Journal Entry Date Debit Credit Dec 31Accurmulated depreciation Patents

Solution

Journal entries: Date Accounts title and explanation Debit $ Credit $ 1-Oct Patents Account Dr. 1476800     Cash account 1476800 31-Dec Amortization expense Account Dr. 73840      Accumulated Amortization 73840 Note: Cost of patents 1476800 Life 5 Annual Amortization 295360 Amortization expense for first year (3 months): 295360 *3/12 = 73840