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    nurseb Posts: 7, Reputation: 1
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    Oct 24, 2007, 06:18 PM
    Patent amortization
    On January 1, 2005, Giant Planting purchased a patent for a new rose for $1,000,000. The patent has a legal life of 10 years and a useful life of 5 years. What adjusting journal entry should Giant prepare on December 31, 2005, relative to this patent?

    a. Amortization Expense $200,000
    Patent $200,000

    b. Amortization Expense $200,000
    Accumulated Amortization $200,000

    c. Amortization Expense $100,000
    Patent $100,000

    d. Amortization Expense $100,000
    Accumulated Amortization $100,000

    e. No adjusting entry is necessary at December 31, 2005.
    nurseb's Avatar
    nurseb Posts: 7, Reputation: 1
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    #2

    Oct 26, 2007, 02:38 PM
    Quote Originally Posted by nurseb
    On January 1, 2005, Giant Planting purchased a patent for a new rose for $1,000,000. The patent has a legal life of 10 years and a useful life of 5 years. What adjusting journal entry should Giant prepare on December 31, 2005, relative to this patent?

    a. Amortization Expense $200,000
    Patent $200,000

    b. Amortization Expense $200,000
    Accumulated Amortization $200,000

    c. Amortization Expense $100,000
    Patent $100,000

    d. Amortization Expense $100,000
    Accumulated Amortization $100,000

    e. No adjusting entry is necessary at December 31, 2005.
    A. Amortization Expense $200,000
    Patent $200,000
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