On September 5, 2020, Nelson Lumber purchased timber rights in Northern Quebec for $432,000, paying $96,000 cash and the balance by issuing a non-current note. Logging the area is expected to take three years, and the timber rights will have no value after that time. On September 27, 2020, Nelson Lumber purchased a patent for $148,000 for new logging equipment on account. It is expected that the patent will be technologically obsolete in 10 years. Nelson’s year-end is December 31 and it uses the straight-line method to amortize intangibles.

Required

1. Record the acquisition of the timber rights and the patent.

2. Record amortization on the timber rights and the patent at December 31, 2020, and December 31, 2021.