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Prepare journal entries
Jan. 2 Paid $45,000 legal costs to successfully defend the patent against infringement by another company.
Dr Patent $45,000
Cr Cash $45,000
You capitalise the legal costs to defend a patent if the case was successful. If not, you expense the legal costs.

Jan.-June Developed a new product, incurring $140,000 in research and development costs. A patent was granted for the product on July 1. Its useful life is equal to its legal life.
GAAP prohibits recording research and development expenditures as assets.
Dr R&D expense $140,000
Cr Cash $140,000

Sept. 1 Paid $50,000 to an extremely large defensive lineman to appear in commercials advertising the company’s products. The commercials will air in September and October.
Dr Advertising expense $50,000
Cr Cash $50,000
(you can expense $25k in Sept and $25k in Oct)

Oct. 1 Acquired a franchise for $100,000. The franchise has a useful life of 50 years
Dr Franchise $100,000
Cr Cash $100,000

Prepare journal entries to record the 2009 amortization expense
Dec 31
Dr Amortization expense - patent $12,000
Dr Amortization expense - franchise 1 $4,800
Dr Amortization expense - franchise 2 $2,000
Cr Patent $12,000
Cr Franchises $6,800

Prepare the intangible assets section of the balance sheet at December 31, 2009
Patent ($115,000 cost less $19,000 amortization) $96,000
Franchises ($148,000 cost less $26,000 amortization) 122,000
Total $218,000
Source(s):
http://cpaclass.com/gaap-accounting-stan…
http://www.principlesofaccounting.com/ch…