AMORTIZATION OF INTANGIBLES On January 1, 2009, Boulder Investments, Inc., acquired a franchise to operate a Burger Doodle restaurant. Boulder paid $160,000 for a 10-year franchise and incurred organization costs of $12,000.

Required:

. Prepare the journal entry to record the cash payment for the franchise fee and the organization costs.

. Prepare the journal entry to record the annual amortization expense at the end of the first year.

Exercise