Question

During 2016, Bramble Corporation spent $178,560 in research and development costs. As a result, a new product called the New Age Piano was patented. The patent was obtained on October 1, 2016, and had a legal life of 20 years and a useful life of 10 years. Legal costs of $30,000 related to the patent were incurred as of October 1, 2016.

Prepare all journal entries required in 2016 and 2017 as a result of the transactions above. (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.) Date Account Titles and Explanation Debit Credit 2016 (To record research and development expenses)

Answer 1

See the journal entries below.

Step-by-step explanation:

The journal entries will look as follows:

Date Description Debit ($) Credit ($)

2016 Research and Development Expense 178,560

Cash 178,560

(To record research and development costs.)

Patents 30,000

Cash 30,000

(To record legal expenses.)

Patent Amortization Expense 750

Patents [($30,000 / 10) * (3/12)] 750

(To record patent amortization for 2016.)

2017 Patent Amortization Expense 3,000

Patents ($30,000 / 10) 3,000

(To record patent amortization for 2017.)