Recording and Amortization of Intangibles
Roland Marshal Company, organized in 2006, has set up a single account for all intangible assets. The following summary disloses the debit entries that have been recorded during 2007.
1/2/07 Purchased patent (8-year life) 350,000
4/1/07 Purchased goodwill (indefinite life) 360,000
7/1/07 Purchased franchise with 10-year life; expiration date 7/1/17 450,000
8/1/07 Payment of copyright (5-year life) 156,000
9/1/07 Research and development costs 215,000
Prepare the necessary entries to clear the Intangible Assets account and to set up separate accounts for distinct types of intangibles. Make the entries as of December 31,2007, recording any necessary amortization and reflecting all balances as of that date. ( Us straight-line amortization)
