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    confused0507's Avatar
    confused0507 Posts: 2, Reputation: 1
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    #1

    Dec 17, 2010, 09:06 AM
    Pete paid the city 1500 for a three year license to operate a business.
    Determine amount of depreciation or other expense to be recorded
    Just Looking's Avatar
    Just Looking Posts: 1,610, Reputation: 480
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    #2

    Dec 17, 2010, 09:13 AM

    A license that is valid for 3 years is set up as a Prepaid, and written off equally over the three years to Taxes and Licenses Expense.
    confused0507's Avatar
    confused0507 Posts: 2, Reputation: 1
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    #3

    Dec 17, 2010, 09:15 AM
    How do I show this in my work. Can you show the formula?
    Just Looking's Avatar
    Just Looking Posts: 1,610, Reputation: 480
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    #4

    Dec 17, 2010, 09:28 AM

    Have you learned about journal entries? Do you understand debits and credits? You would also write it off on a monthly basis at 1500/36.
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