Prepare the essential entries to clear the intangible assets

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Reference no: EM132880

Question :

Reichenbach Co., organized in 2013, has set up a one account for all intangible assets. The subsequent summary discloses the debit entries that have been recorded during 2014 and 2015.

Intangible Assets

7/1/14 8-year franchise; expiration date 6/30/22 $60,960

10/1/14 Advance payment on laboratory space (2-year lease) 26,120

12/31/14 Net loss for 2013 including state incorporation fee, $1,080, and related legal fees of organizing, $5,160 (all fees incurred in 2013) 17,530

1/2/15 Patent purchased (10-year life) 86,840

3/1/15 Cost of developing a secret formula (indefinite life) 76,600

4/1/15 Goodwill purchased (indefinite life) 278,030

6/1/15 Legal fee for successful defense of patent purchased above 23,000

9/1/15 Research and development costs 170,500

Prepare the essential entries to clear the Intangible Assets account and to set up separate accounts for distinct types of intangibles. Make the entries as of December 31, 2015, recording any essential amortization.

Reference no: EM132880

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