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During 2017, Metlock Corporation spent $550,000 in research and development costs. As a result, a new...

During 2017, Metlock Corporation spent $550,000 in research and development costs. As a result, a new product was patented. The patent was obtained on July 1, 2017 and had a legal life of 20 years and useful life of 10 years. Legal costs of $140,000 related to the patent were incurred as of July 1, 2017.

(1.) Prepare journal entries (4) required for 2017 and 2018.

On October 1, 2019, Metlock spent $120,000 to successfully defend a patent infringement case against their product. As a result, the estimate of useful life was extended to 15 years from October 1, 2019.

(2.) Prepare all journal entries (3) required for 2019.

On April 15, 2020, Metlock determined that a competitor’s product would make the new patent obsolete and the patent worthless by December 2021. (1 entry)

(3.) Prepare all journal entries required for 2020.

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