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 $1,820,000 in cash. The fair value of the net identifiable assets of Johnstone was $1,550,000. b. Included in the assets purchased from Johnstone was a patent that was valued at $84,600. The remaining legal life of the patent was 14 years, but Epstein believes that the patent will only be useful for another nine years. c. Epstein acquired a franchise on October 1, 2021, by paying an initial franchise fee of $206,800. The contractual life of the franchise is 11 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 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 View transaction list View journal entry worksheet Debit Credit No Transaction General Journal 11 a No journal entry required Amortization expense Patent 3 Amortization expense Franchise Required 1 Required 2 >

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Answer 1

	General Journal	Debit	Credit
a	No Journal entry required
b	Amortization expense	4700		=84600/9*6/12
	Patent		4700
c	Amortization expense	4700		=206800/11*3/12
	Franchise		4700
	2
	Partial Balance Sheet
	December 31,2021
	Intangible Assets:
	Goodwill	270000		=1820000-1550000
	Patent	79900		=84600-4700
	Franchise	202100		=206800-4700
	Total intangibles	552000