Question

The intangible assets section of Marigold Corporation's balance sheet at December 31, 2022, is presented here.

Patents ($71,800 cost less $7,180 amortization) $63,400
Copyrights ($50,500 cost less $39,400 amortization) 11,100
Total $74,500
The patent was acquired in January 2022 and has a useful life of 10 years. The copyright was acquired in January 2016 and also has a useful life of 10 years. The following cash transactions may have affected intangible assets during 2023.
Jan. 2 Paid $45,000 legal costs to successfully defend the patent against infringement by another company.
Jan.- June Paid $43,000 to a quarterback to appear in commercials advertising the company's products. The commercials will air in September and October.
Sept. 1 Paid $43,000 to a quarterback to appear in commercials advertising the company's products. The commercials will air in September and October.
Oct. 1 Acquired a copyright for $257,000. The copyright has a useful life and legal life of 50 years.
Prepare journal entries to record the 2023 amortization expense for intangible assets.

Answer 1

Journal entries to record the 2023 amortization expense for intangible assets.

Date Accounts Titles and Explanation Debit Credit

Dec 31 Amortization Expense—Patents $14,180

($71,800*1/10 + $45,000 * 1/9

+ $40,000*1/10*6/12)

Patents $14,180

(To record amortization of patents)

Dec 31 Amortization Expense - Copyrights $6,335

($50,500*1/10 + $257,000*1/50*3/12)

Copyright $6,335

(To record amortization of copyrights)