Reference no: EM132776533

The Horstmeyer Corporation commenced operations early in 2021. A number of expenditures were made during 2021 that were debited to one account called intangible asset. A recap of the $180,500 balance in this account at the end of 2021 is as follows:
 
Date Transaction Amount
Feb3 State incorporation fees and legal costs related to organizing the corporation$6,000
March 1 Fire insurance premium for three-year period 5,000
March 15 Purchased a copyright 27,000
April 30 Research and development costs 47,000
June 15 Legal fees filing a patent on a new product resulting from an R&D 6500
September 30 Legal fee for successful defense of patent developed above 19,000
October 13 Entered a 10-year franchise agreement with franchisor 47000 VariousAdvertising costs 23,000
Total$180,500

Required:

Problem 1: Prepare the necessary journal entry to clear the intangible asset account and to set up accounts for separate intangible assets, other types of assets, and expenses indicated by the transactions. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.)

Problem 2: Journal entry worksheet

Problem 3: Record the entry to reclassify various expenditures incorrectly charged to the intangible asset account.