2. Yolanda Company created a product for which it was able to obtain a patent. Yolanda sold the patent

to Christiana Inc. for $20,780,000 at the beginning of 20X4. Christiana paid an additional $200,000

in legal fees to properly record the patent. At the beginning of 20X4, Christiana determined that the

patent had a remaining life of seven years.

d. During 20X6, Christiana is sued by Bushnell Corporation, who claims that it has a patent on

a product similar to the one held by Christiana and that Bushnells patent was registered first.

After a lengthy court battle, in December of 20X7, Christiana discovers that it has successfully

defended its patent. The defense of the patent cost Christiana $1,700,000 in legal fees. Record

any necessary journal entries dealing with the court battle.

e. Christiana reaffirms that the patent has a remaining life of three years on December 31,

20X7. Record amortization expense on this date.

f. What is the book value of the patent reported on Christianas balance sheet at the end of

20X7?