Amortization Entries Kleen Company acquired patent rights on January 10 of Year

Question

Amortization Entries Kleen Company acquired patent rights on January 10 of Year 1 for $488,000. The patent has a useful life equal to its legal life of eight years. On January 7 of Year 4, Kleen successfully defended the patent in a lawsuit at a cost of $24,500. If required, round your answer to the nearest dollar.

a. Determine the patent amortization expense for the Year 4 ended December 31. $

b. Journalize the adjusting entry on December 31 of Year 4 to recognize the amortization.

Amortization Expense-Patents

Patents

Explanation / Answer

Cost of Patents 488000 Life of patents 8 years Annual Amortization 61000 ( 488000 /8 years) Additional cost incurred in Year-4 24500 Amortized for remaining 5 years 4900 Total Amortization expense 65900 Req a: Amortization expense for2014: 65900 Req b: Journal entry: Amortization expense Account Dr. 65900      Patents rights 65900

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