Remini Company produces computer software that is sold by Elton Comp, Inc. Remini receives a royalty of 1 5 percent of sales. Royalties are paid by Elton Comp and received by Remini semiannually on May 1 for sales made in July through December of the previous year and on November 1 for sales made in January through June of the current year. Royalty expense for Elton Comp and royalty income for Remini in the amount of

$12,000 were accrued on December 31, 20x2. Cash in the amounts of $12,000 and

$20,000 was paid and received on May 1 and November 1, 20x3, respectively. Software sales during the July to December 20x3 period totaled $300,000.

1 . Calculate the amount of royalty expense for Elton Comp and royalty income for Remini during 20x3.

2. Record the adjusting entry made by each company on December 31, 20x3.