Question

The following information concerns the intangible assets of Epstein Corporation: a. On June 30, 2021, Epstein completed the acquisition of the Johnstone Corporation for $1,700,000 in cash. The fair value of the net identifiable assets of Johnstone was $1,450,000. b. Included in the assets purchased from Johnstone wass a patent that was valued at $72,000. The remaining legal life of the patent was 13 years, but Epstein believes that the patent will only be useful for another eight years c. Epstein acquired a franchise on October 1, 2021, by paying an initial franchise fee of $180,000. The contractual life of the franchise is 10 years. Required: 1. Prepare year-end adjusting journal entries to record amortization expense on the intangibles at December 31, 2021. 2. Prepare the intangible asset section of the December 31, 2021, balance sheet. Complete this question by entering your answers in the tabs below. Required Required 1 2 Prepare year-end adjusting journal entries to record amortization expense on the intangibles at December 31, 2021. ((Do not round intermediate calculations.). If no entry is required for a transaction/event, select "No journal entry required" in the first account field.) Show less A View transaction list Journal entry worksheet 1 2 Record the goodwill amortization Note: Enter debits before credits. Transaction General Journal Debit Credit a View general journal Record entry Clear entry Required 1 Required 2

Answer 1

	General Journal	Debit	Credit
a	No Journal entry required
b	Amortization expense	4500		=72000/8*6/12
	Patent		4500
c	Amortization expense	4500		=180000/10*3/12
	Franchise		4500
	2
	Partial Balance Sheet
	Intangible Assets:
	Goodwill	250000		=1700000-1450000
	Patent	67500		=72000-4500
	Franchise	175500		=180000-4500
	Total intangibles	493000