Question

Janes Company provided the following information on intangible assets: a. A patent was purchased from the Lou Company for $1,500,000 on January 1, 2019. Janes estimated the remaining useful life of the patent to be 10 years. The patent was carried on Lou's accounting records at a net book value of $510,000 when Lou sold it to Janes. b. During 2021, a franchise was purchased from the Rink Company for $660,000. The contractual life of the franchise is 10 years and Janes records a full year of amortization in the year of purchase. C. Janes incurred research and development costs in 2021 as follows: k Materials and supplies Personnel Indirect costs Total $156,000 196,000 76,000 $428,000 псе d. Effective January 1, 2021, based on new events that have occurred, Janes estimates that the remaining life of the patent purchased from Lou is only five more years. Required: 1. Prepare the entries necessary for years 2019 through 2021 to reflect the above information. 2. Prepare a schedule showing the intangible asset section of Janes's December 31, 2021, balance sheet. Complete this question by entering your answers in the tabs below. Required Required 1 2 Prepare the entries necessary for years 2019 through 2021 to reflect the above information. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.) View transaction list Journal entry worksheet 1 2 3 4 5 6 7 > Record the purchase of a patent. Note: Enter debits before credits. General Journal Debit Credit Date January 01, 2019

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Answer 1

No.	Date	General Journal	Debit	Credit
1.	Jan-1, 2019	Patent	1,500,000
		Cash		1,500,000
2.	Dec-31, 2019	Amortization expense	150,000
		Patent		150,000
3.	Dec-31, 2020	Amortization expense	150,000
		Patent		150,000
4.	Dec-31, 2021	Franchise	660,000
		Cash		660,000
5.	Dec-31, 2021	Amortization expense	66,000
		Franchise		66,000
6.	May-20, 2021	Research and Development expense	428,000
		Cash		428,000
7.	Dec-31, 2021	Amortization expense(1500000-150000-150000)/5	240,000
		Patent		240,000

Intangible Assets:
Patent	960,000
Franchise	594,000
Total Intangibles	1,554,000