Denmark Corporation has the following transactions - year ended December 31, 201

Question

Denmark Corporation has the following transactions - year ended December 31, 2017:

Jan. 1

Purchased a patten protection for $1220 cash. The patten protection has a useful life of six years and a remaining legal life of thirty years.

Mar. 1

Acquired a small store with a contract of nine years for $50280; the expiration date is March 1, 2026

Paid cash of $4330 and borrowed the remainder from the bank.

Sept. 1

Purchased a trademark for $7780 cash.

Spent $3560 cash in legal fees

Can someone show me how to prepare entries?

Also how to record any amorization on Dec31 if reqd

Explanation / Answer

Answer

Journal entries:

Date Particulars Dr Cr Jan. 1 patten protection(Copyright) $1220 Cash $1220 1-Mar Small store (Contract) $50280 Cash $50280 1-Sep Trademark $7780 Cash $7780 1-Sep Trademark $3560 Cash $3560 31-dec. Amortization Expense ( $ 1220 / 6) $203 Accumulated Amortization - patten protection $203 Amortization Expense (50280 / 9) $5587 Accumulated Amortization - Small store $5587

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