Question

On January 1, 2022, Cullumber Company had a balance of $359,500 of goodwill on its balance sheet that resulted from the purchase of a small business in a prior year. The goodwill had an indefinite life. During 2022, the company had the following additional transactions 

Jan. 2 Purchased a patent (6-year life) $324,450. 

July 1 Acquired a 8-year franchise; expiration date July 1, 2,030, $612,000 

Sept. 1 Research and development costs $184,000. MacBook Air J K

Make an entry as of December 31, 2022, recording any necessary amortization. (Round answers to decimal places, eg. 125. Credit account titles are automatically indented when the amount is entered. Do not indent manually. If no entry is required, select "No Entry for the account titles and enter for the amounts.) 

Answer 1

$612000 8 years Amortization expense on franchise $ 76,500 per year As, the franchise was acquired on July 1, Amortization expense will be charged for half year $76500 x 6/12 $ 38,250 Description 31-12-2022 Amortization expense Credit Date Debit $92,325.00 $54,075.00 $38,250.00 Patents Franchise (To record amortization expense)

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