Prepare journal entries to record the transactions

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Reference no: EM132184689

Problem - The intangible assets section of Swifty Corporation's balance sheet at December 31, 2017, is presented here.

Patents ($84,600 cost less $8,460 amortization)  $76,140

Copyrights ($37,500 cost less $26,250 amortization) 11,250

Total $87,390

The patent was acquired in January 2017 and has a useful life of 10 years. The copyright was acquired in January 2011 and also has a useful life of 10 years. The following cash transactions may have affected intangible assets during 2018.

Jan. 2 Paid $54,000 legal costs to successfully defend the patent against infringement by another company.

Jan. - June Developed a new product, incurring $237,500 in research and development costs. A patent was granted for the product on July 1, and its useful life is equal to its legal life. Legal and other costs for the patent were $10,000.

Sept. 1 Paid $43,500 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 $289,000. The copyright has a useful life and legal life of 50 years.

Prepare journal entries to record the transactions.

Reference no: EM132184689

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