Question

1-

Larkspur, Inc., spent $63,000 in attorney fees while developing the trade name of its new product, the Mean Bean Machine.

Prepare the journal entries to record the $63,000 expenditure and the first year’s amortization, using an 10-year life. Use the account title "Trade Names". (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.)

Account Titles and Explanation	Debit	Credit
enter an account title to record expenditure of trade names	enter a debit amount	enter a credit amount
enter an account title to record expenditure of trade names	enter a debit amount	enter a credit amount
(To record expenditure of trade names)
enter an account title to record amortization expense	enter a debit amount	enter a credit amount
enter an account title to record amortization expense	enter a debit amount	enter a credit amount
(To record amortization expense)

2-

As the recently appointed auditor for Indigo Corporation, you have been asked to examine selected accounts before the 6-month financial statements of June 30, 2020, are prepared. The controller for Indigo Corporation mentions that only one account is kept for intangible assets. The account is shown below.

Intangible Assets
				Debit		Credit		Balance
Jan. 4		Research and development costs		950,000				950,000
Jan. 5		Legal costs to obtain patent		76,800				1,026,800
Jan. 31		Payment of 7 months’ rent on property
		leased by Indigo		98,000				1,124,800
Feb. 11		Premium on common stock				250,000		874,800
March 31		Unamortized bond discount on bonds
		due March 31, 2040		132,000				1,006,800
April 30		Promotional expenses related to
		start-up of business		210,700				1,217,500
June 30		Operating losses for first 6 months		243,000				1,460,500

Prepare the entries necessary to correct this account. Assume that the patent has a useful life of 10 years.

Answer 1

Account Titles and Explanation	Debit	Credit
Trade Names	$63,000
Cash		$63,000
(To record expenditure of trade names)
Amortization Expense($63000 / 10)	$6300
Trade Names		$6300

As HOMEWORKLIB RULES, Only first question has to be answered.