Question

Denmark Corporation has the following transactions - year ended December 31, 2017:

Jan. 1

Purchased a patten protection for $1220 cash. The patten protection has a useful life of six years and a remaining legal life of thirty years.

Mar. 1

Acquired a small store with a contract of nine years for $50280; the expiration date is March 1, 2026

Paid cash of $4330 and borrowed the remainder from the bank.

Sept. 1

Purchased a trademark for $7780 cash.

Spent $3560 cash in legal fees

Can someone show me how to prepare entries?

Also how to record any amorization on Dec31 if reqd

Answer 1

Answer

Journal entries:

Date	Particulars	Dr	Cr
Jan. 1	patten protection(Copyright)	$1220
	Cash		$1220
1-Mar	Small store (Contract)	$50280
	Cash		$50280
1-Sep	Trademark	$7780
	Cash		$7780
1-Sep	Trademark	$3560
	Cash		$3560
31-dec.	Amortization Expense ( $ 1220 / 6)	$203
	Accumulated Amortization - patten protection		$203
	Amortization Expense (50280 / 9)	$5587
	Accumulated Amortization - Small store		$5587