Test: Exam 3 This Test: 41 pts p This Question: 1 pt 26 of 41 (22 complete) TLR

Question

Test: Exam 3 This Test: 41 pts p This Question: 1 pt 26 of 41 (22 complete) TLR Productions pays $75,000 on January 1 to acquire a patent on a new production tool. It is expected that this patent's useful life will be 5 years. What will the jounal entry be to record the first years amortization? O A. Debit Amortization Expense $15,000, credit Accumulated Amortization $15,000 O B. Debit Patents $75,000, credit Amortization $75,000 O C. Debit Amortization Expense $15,000, credit Patents $15,000 O D. Debit Amortization Expense $75,000, credit Cash $75,000 Click to select vour ansupr ype here to search

Explanation / Answer

Option C -

Debit Amortization Expense $15000 and Credit Patent Account.

The acquired patent is to be amortized over its useful life. Here, useful life is 5 Years.

Hence, every year $15000 (75000/5) will be charged to P/L for 5 years.

Related Questions

Navigate

• Browse (All)
• Browse T
• Subjects

---

---

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.