Question

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. 1/2/20 Purchased patent (9-year life) 4/1/20 Purchase goodwill (indefinite life) on date 7/1/30 7/1/20 Purchased franchise with 10-year life; expiration date 7/1/30 8/1/20 Payment of copyright (5-year life) 9/1/20 Research and development costs $407,700 363,000 443,000 171,600 233,000 $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 O for the amounts.) Account Titles and Explanation Debit Credit

Answer 1

1
Account Titles and Explanation	Debit	Credit
Patents	407700
Goodwill	363000
Franchises	443000
Copyrights	171600
Research and Development Expense	233000
Intangible Assets		1618300
2
Account Titles and Explanation	Debit	Credit
Amortization Expense	81750
Patents		45300	=407700/9
Franchise		22150	=443000/10*6/12
Copyright		14300	=171600/5*5/12
3
Use straight-line amortization
Patents	362400		=407700-45300
Goodwill	363000
Franchise	420850		=443000-22150
Copyright	157300		=171600-14300