Amortization of Intangibles On January 1, 2019, Boulder Investments Inc. acquired a franchise to operate a Burger Doodle restaurant. Boulder paid $155,200 for a 16-year franchise and incurred Organization costs of $12,000 Required: 1. Prepare the journal entry to record the cash payment for the franchise foe and the organization costs, 2019 Jan. 1 Franchise 164,700 X Cash 16.200 X (Record purchase of franchise) 12.000 12.000 2019 Jan. 1 Organizational Costs Cash (Record organizational costs) Feedback Olack My Work 1. Use the historical cost principle to record the purchase of an intangible asset. Under this coul principle, the cost of an intangible is an expenditure necessary to acquire the asset and to prepare for use Determine if organizational cost is an expense or an intangible asset 2. Prepare the journal entry to record the annual amortization expense at the end of the first year 2019 Dec. 31 Amortization Expense 16420 X Franchise 16420 X (Record amortization of franchise) Previous Next