The following information concerns the intangible assets of Epstein Corporation:
ID: 2488521 • Letter: T
Question
The following information concerns the intangible assets of Epstein Corporation: On June 30. 2016. Epstein completed the acquisition of the Johnstone Corporation for $1,820,000 in cash. The fair value of the net identifiable assets of Johnstone was $1.550.000 Included in the assets purchased from Johnstone was a patent that was valued at $84,600 The remaining legal life of the patent was 14 years, but Epstein believes that the patent will only be useful for another nine years. Epstein acquired a franchise on October 1. 2016. by paying an initial franchise fee of $206,800 The contractual life of the franchise is 11 years. Required: Prepare year-end adjusting journal entries to record amortization expense on the intangibles at December 31.2016. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.)Explanation / Answer
Journal Entry Worksheet:
Transaction
General Journal
Debit
Credit
A
Amortisation Expense
$27,000
Goodwill
$27,000
B
Amortisation Expense
$4,700
Patent A/c
$4,700
C
Amortisation Expense
$4,700
Franchise A/c
$4,700
Notes:
Transaction
General Journal
Debit
Credit
A
Amortisation Expense
$27,000
Goodwill
$27,000
B
Amortisation Expense
$4,700
Patent A/c
$4,700
C
Amortisation Expense
$4,700
Franchise A/c
$4,700
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