BioPharma Innovations had the following transactions related to its long-term assets during the year ending December 31, 20X1:

• On January 1, purchased a patent for $250,000 with a legal life of 20 years and an estimated useful life of 10 years.
• On June 30, purchased equipment for $500,000 with an estimated residual value of $50,000 and a useful life of 8 years.
• On September 1, purchased a building for $1,500,000 with an estimated residual value of $100,000 and a useful life of 40 years.

Required:

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