Question

Makon Printers incurred external costs of $800,000 for a patent for a new laser printer. Although the patent gives legal protection for 20 years, it was expected to provide Makon with a competitive advantage for only ten years due to expected technological advances in the industry. Makon uses the straight-line method of amortization. (Click the icon to view additional information.) Read the requirements. Requirement 1. Make journal entries to record (a) the purchase of the patent and (b) amortization for year 1. (Record debits first, then credits. Exclude explanations from any journal entries.) Start by recording (a) the purchase of the patent. Journal Entry Date Accounts Debit Credit Record (b) the amortization of the patent for year 1. Journal Entry Date Accounts Debit Credit Choose from any list or enter any number in the input fields and then click Check Answer.

Answer 1

Answer:

Date	Accounts titles and Explanation	Debit ($)	Credit ($)
20XX
Jan-01	Patent	800,000
	Cash		800,000
	( to record For patent purchased)
Particulars	Amount ($)
Asset Value	8,00,000
Years of amortization	10
Yearly amortization	80,000
Amortization First year	80,000
Date	Accounts titles and Explanation	Debit ($)	Credit ($)
20XX
Dec-31	Amortization Expense	80,000
	Patent		80,000
	(to record For patent amortized for 1st year)