Question

Brief Exercise 12-2 Your answer is partially correct. Try again Sarasota Corporation purchases a patent from Ivanhoe Company on January 1, 2017 for $72,000. The patent has a remaining legal lide of 16 years. Sarasota feels the patent will be useful for 10 years. Assume that at January 1, 2019, the carrying amount of the patent on Sarasota's books is 557,600. In January, Sarasota spends $32.300 successfully defending patent suit. Sarasota still feels the patient will be useful until the end of 2026 Prepare the journal entries to record the $32.800 expenditure and 2019 amortization. (Credit account titles are automatically indented when amount is entered. Do not inde manually. If no entry is required, select "No Entry for the account titles and enter for the amounts) Account Titles and Explanation Debit Credit Patents Cash (To record expenditure of patents) Amortization Expense Patents (To record amortization expense)

Answer 1

Account Titles	Debit	Credit
Patents	$            32,800
Cash		$          32,800
(Spent on defending patent successfully)
Amoritzation Expense	$            11,300
Patents		$          11,300
(To record amortization expense)

Amortization Expense = ($57600+32800)/8 = $11300