Question

Amortization Entries Kleen Company acquired patent rights on January 10 of Year 1 for $2,800,000. 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 $38,000. a. Determine the patent amortization expense for Year 4 ended December 31. b. Journalize the adjusting entry on December 31 of Year 4 to recognize the amortization. If an amount box does not require an entry, leave it blank. 10 mere Check My Work uses remaining.

Answer 1

a) Patent amortization expense for year 4 = (2.800,000/8 years + 38.000/5 years) = 357.600 b) Adjusting entry : Credit Date Account title and explanation Dec. 31, Yr 4 Amortization expense Accumlated amortization-Patent Debit 357.600 357,600