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These are selected 2022 transactions for Kingbird Corporation. Jan. 1 Purchased a copyright for $126,000. The copyright has a useful life of 6 years and a remaining legal life of 30 years. Mar. 1 Purchased a patent with an estimated useful life of 4 years and a legal life of 20 years for $56,400. Sept. 1 Purchased a small company and recorded goodwill of $150,000. Its useful life is indefinite. Prepare all adjusting entries at December 31 to record amortization required by the events.

User Gargo
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Answer:

Dec. 31

Dr Amortization Expense $21,000

Cr Copyright $21,000

Dec. 31

Dr Amortization Expense $11,750

Cr Patent $11,750

Dec. 31

No entry

Step-by-step explanation:

Preparation of all adjusting entries at December 31 to record amortization required by the events.

Dec. 31

Dr Amortization Expense $21,000

Cr Copyright $21,000

($126,000/6)

(To record amortization of copyright)

Dec. 31

Dr Amortization Expense $11,750

Cr Patent $11,750

(To record amortization of patent)

Dec. 31

No entry

(To record amortization of goodwill)

Calculation for 2020 amortization

First step is to calculate the Annual amortization

Annual amortization = $56,400/4

Annual amortization= $14,100

Now let calculate 2020 amortization

2020 amortization = $14,100 x 10/12

2020 amortization= $11,750

User Pebbl
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