Question

Oriole Company, organized in 2019, has set up a single account for all intangible assets. The following summary discloses the debit entries that have been recorded during 2020.

1/2/20		Purchased patent (7-year life)		$311,500
4/1/20		Purchase goodwill (indefinite life)		355,000
7/1/20		Purchased franchise with 10-year life; expiration date 7/1/30		435,000
8/1/20		Payment of copyright (5-year life)		162,000
9/1/20		Research and development costs		225,000
				$1,488,500

Prepare the necessary entry to clear the Intangible Assets account and to set up separate accounts for distinct types of intangibles. (Credit account titles are automatically indented when amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts.)

Account Titles	Debit	Credit

Make the entry as of December 31, 2020, recording any necessary amortization. (Credit account titles are automatically indented when amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts.)

Account Titles	Debit	Credit

Reflect all balances accurately as of December 31, 2020.

Reflect all balances accurately as of December 31, 2020.

Use straight-line amortization
		$
		$
		$
		$

Answer 1

1
Account Titles and Explanation	Debit	Credit
Patents	311500
Goodwill	355000
Franchises	435000
Copyrights	162000
Research and Development Expense	225000
Intangible Assets		1488500
2
Account Titles and Explanation	Debit	Credit
Amortization Expense	79750
Patents		44500	=311500/7
Franchise		21750	=435000/10*6/12
Copyright		13500	=162000/5*5/12
3
Use straight-line amortization
Patents	267000		=311500-44500
Goodwill	355000
Franchise	413250		=435000-21750
Copyright	148500		=162000-13500