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Chapter 12: 12-10Q (page 637)

Izzy Inc. purchased a patent for $350,000 which has an estimated useful life of 10 years. Its pattern of use or consumption cannot be reliably determined. Prepare the entry to record the amortization of the patent in its first year of use.

Short Answer

Expert verified

Debited 35,000(350,000/10) as Amortization Expense

Credited 35,000(350,000) as patents.

Step by step solution

01

Meaning of Patent

A patent is a legal right granted to a person or company to reproduce, use, or sell an invention without the interference of others.

02

Journal Entry

Date

Particulars

Debit

Credit

Amortization expense A/C …………..Dr.

To Patents A/C

$35,000

35,000

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Most popular questions from this chapter

Hillsborough Co. has a held-to-maturity investment in the bonds of Schuyler Corp. with a carrying value of \(70,000. Hillsborough determined that due to poor economic prospects for Schuyler, the bonds have decreased in value to \)60,000. It is determined that this loss in value is uncollectible. Prepare the journal entry, if any, to record the reduction in value.

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