Brief Exercise 12-1 Novak Corporation purchases a patent from Wildhorse Company

Question

Brief Exercise 12-1 Novak Corporation purchases a patent from Wildhorse Company on January 1, 2017, for $76,000. The patent has a remaining legal life of 13 years. Novak feels the patent will be useful for 10 years. Prepare Novak's journal entries to record the purchase of the patent and 2017 amortization. (Credit account titles are automatically indented when amount is entered. Do not indent manually. If r enter 0 for the amounts.) Account Titles and Explanation Debit Credit To record purchase of patents) (To record amortization of patents)

Explanation / Answer

Account titles and explanation Debit Credit Patents $76,000 Cash $76,000 Amortization Expense($76,000 / 10) $7,600 Patents $7,600

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