A company purchased a patent on January 1, 2022 for $2,500,000. The patent's legal life is 20 years but the company estimates that the patent's useful life will only be 5 years from the date of acquisition. On June 30, 2022, the company paid legal costs of $162,000 in successfully defending the patent in an infringement suit.

Indicate the accounts increased/decreased to amortize the patent at year end on December 31, 2022.

Date

Account Titles

Increase/Decrease

Amount

December 31, 2022

enter an account title on December 31, 2022

Patents

select an option

Increase

$enter a dollar amount

2500000

enter an account title on December 31, 2022

Amortization Expense

select an option

Increase

$enter a dollar amount

516200

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Milner Company purchased a franchise from the Tasty Food Company for $450,000 on January 1, 2022. The franchise is for an indefinite time period and gives Milner Company the exclusive rights to sell Tasty Wings in a particular territory.

Indicate the accounts increased/decreased to record the acquisition of the franchise and any necessary adjustment at year end on December 31, 2022.

Date

Account Titles

Increase/Decrease

Amount

January 1, 2022

enter an account title on January 1, 2022

Franchise

select an option

Increase

$enter a dollar amount

450000

enter an account title on January 1, 2022

Other Operating Expenses

select an option

Increase

$enter a dollar amount

450000