Question

In 2021, Bratten Fitness Company made the following cash purchases:

1. The exclusive right to manufacture and sell the X-Core workout equipment from Symmetry Corporation for $212,000. Symmetry created the unique design for the equipment. Bratten also paid an additional $16,000 in legal and filing fees to attorneys to complete the transaction.
2. An initial fee of $305,000 for a three-year agreement with Silver’s Gym to use its name for a new facility in the local area. Silver’s Gym has locations throughout the country. Bratten is required to pay an additional fee of $6,200 for each month it operates under the Silver’s Gym name, with payments beginning in March 2021. Bratten also purchased $412,000 of exercise equipment to be placed in the new facility.
3. The exclusive right to sell Healthy Choice, a book authored by Kent Patterson, for $31,000. The book includes healthy recipes, recommendations for dietary supplements, and natural remedies. Bratten plans to display the book at the check-in counter at its new facility, as well as make it available online.

Prepare a summary journal entry to record expenditures related to initial acquisitions. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.)

Journal entry worksheet

• Record the expenditures related to initial acquisitions.

Note: Enter debits before credits.

	Transaction General Journal Debit Credit 1

Answer 1

Solution
Journal entry to record payment in acquiring the assets :
Event	General journal	Debit	Credit
1	Patent(212,000+16000)	$     2,28,000
	Franchise	$     3,05,000
	Equipment	$     4,12,000
	Copyright	$        31,000
	Cash		$    9,76,000
Franchise: The ongoing expense each month of operating as a Franchise would be expensed as incurred.
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Answer 2

In my book: The numbers were different.

DR - Patent ($200,000+$10000) = $210,000

DR - Franchise                               $300,000

DR - Equipment                              $400,000

DR - Copyright                                $  25,000

    CR - Cash                                                $935,000