AE12 - AE12-6 Correct(Recording and Amortization of...

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AE12-6 Correct. (Recording and Amortization of Intangibles) Rolanda Marshall Company, organized in 2006, has set up a single account for all intangible assets. The following summary discloses the debit entries that have been recorded during 2007. 1/2/07 Purchased patent (8-year life) $360,000 4/1/07 Purchased goodwill (indefinite life) 420,000 7/1/07 Purchased franchise with 10-year life; expiration date 7/1/17 450,000 8/1/07 Payment of copyright (5-year life) 156,000 9/1/07 Research and development costs 215,000 $1,601,000 Instructions (a) Prepare the necessary entries to clear the Intangible Assets account and to set up separate accounts for distinct types of intangibles. Description Debit Credit Patents 360000 Goodwill 420000 Franchise 450000 Copyright 156000 Research and Development Expense 215000 Intangible Assets 1601000 (b) Make the entries as of December 31, 2007, recording any necessary amortization and reflecting all balances accurately as of that date. (Use straight-line amortization.)
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AE12 - AE12-6 Correct(Recording and Amortization of...

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