Question

Question 4 --/1.5 View Policies Current Attempt in Progress Wildhorse Co. purchases a patent for $172.400 on January 2, 2022. Its estimated useful life is 8 years. (a) Prepare the journal entry to record amortization expense for the first year. (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 for the amounts.) Account Titles and Explanation Debit Credit (b) Show how this patent is reported on the balance sheet at the end of the first year.

Answer 1

Answer- a)-Journal entry to record Amortization expense for first year-

Date	Accounts Titles & Explanation	Debit	Credit
		$	$
First Year	Amortization expense	21550
	Patents		21550
	(Being entry recorded for amortization expense)

Explanation- Amortization expense for first year = Cost of Patent/Estimated life

= $172400/8 years

= $21550

b)- Reported on the balance sheet at the end of the first year-

Intangible Assets-

Patents (Net of $21550 of amortization)                             $150850