Question

Make the entry as of December 31, 2020, recording any necessary amortization.

Crane Company, organized in 2019, has set up a single account for all intangible assets. The following summary discloses the debit entries that have been recorded during 2020. Purchased patent (9-year life) $407,700 1/2/20 Purchase goodwill (indefinite life) 4/1/20 363,000 7/1/20 Purchased franchise with 10-year life; expiration date 7/1/30 443,000 Payment of copyright (5-year life) 8/1/20 171,600 Research and development costs 9/1/20 233,000 $1,618,300 Prepare the necessary entry to clear the Intangible Assets account and to set up separate accounts for distinct types of intangibles. (Credit account titles are automatically indented when amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts.)

Reflect all balances accurately as of December 31, 2020.

Use straight-line amortization

Answer 1

Intangible Assets	Computation	Amortization expenses for 2020
Patent	$407,700/9 years	$45,300
Franchise	$443,000/10 years*6/12	$22,150
Copyright	$171,600/5 years*5/12	$14,300
Total Amortization expenses for 2020		$81,750
	Debit	Credit
Amortization expenses-Patent	$45,300
Amortization expenses-Franchise	$22,150
Amortization expenses-Copyright	$14,300
Accumulated Amortization-Patent		$45,300
Accumulated Amortization-Franchise		$22,150
Accumulated Amortization-Copyright		$14,300

Answer 2

Intangible Assets	Computation	Amortization expenses for 2020
Patent	$407,700/9 years	$45,300
Franchise	$443,000/10 years*6/12	$22,150
Copyright	$171,600/5 years*5/12	$14,300
Total Amortization expenses for 2020		$81,750
	Debit	Credit
Amortization expenses-Patent	$45,300
Amortization expenses-Franchise	$22,150
Amortization expenses-Copyright	$14,300
Accumulated Amortization-Patent		$45,300
Accumulated Amortization-Franchise		$22,150
Accumulated Amortization-Copyright		$14,300