BioMedica Inc. is preparing its financial statements for the year ending December 31, 20X1. The company had the following transactions related to its long-term assets: On January 1, BioMedica purchased a patent for $200,000 with a legal life of 20 years, but the company estimates the patent will be useful for 10 years. On June 30, BioMedica purchased equipment for $400,000 with an estimated residual value of $50,000 and a useful life of 10 years. On October 1, the company purchased a building for $1,200,000 with an estimated residual value of $100,000 and a useful life of 30 years.

Required:

1. Calculate the amortization expense for the patent for the year ending December 31, 20X1.
2. Calculate the depreciation expense for the equipment and building for the year ending December 31, 20X1, using the straight-line method.
3. Prepare the journal entries to record the amortization and depreciation expenses for the year.
4. Discuss the impact of amortization and depreciation on the company’s income statement and balance sheet.