(Accounting for Patents) During 2000, George Winston Corporation spent $170,000 in research and development costs. As a result, a new product called the New Age Piano was patented. The patent was obtained on October 1, 2000, and had a legal life of 20 years and a useful life of 10 years. Legal costs of $18,000 related to the patent were incurred as of October 1, 2000.

Instructions

(a) Prepare all journal entries required in 2000 and 2001 as a result of the transactions above.

(b) On June 1, 2002, Winston spent $9,480 to successfully prosecute a patent infringement. As a result, the estimate of useful life was extended to 12 years from June 1, 2002. Prepare all journal entries required in 2002 and 2003.

(c) In 2004, Winston determined that a competitor’s product would make the New Age Piano obsolete and the patent worthless by December 31, 2005. Prepare all journal entries required in 2004 and 2005.