AMORTIZATION OF INTANGIBLES. 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. The cost of the franchise will be amortized over 10 years, and the organization costs will be amortized over 5 years.

REQUIRED:

1. Prepare the journal entry to record the payment with cash of the franchise fee and organization costs.

2. Prepare the journal entries to record the annual amortization at the end of the first year.