Crane company from time to time embarks on a research program when a special project seems to offer possibilities. In 2016, the company expends $ 331,500 on a research project, but by the end of 2016 it is impossible to determine whether any benefit will be derived from it.

The project is completed in 2017, and a successful patent is obtained. The R & D cost to complete the project are $ 121,500. The administrative and legal expenses incurred in obtaining patent number 472-1001-84 in 2017 total $ 18,300. The patent has expected useful life of 5 years. Record these cost in journal entry form. Also record patent amortization (full year) in 2017.

Account Titles and explanation Debit Credit

_____________________________________ ______________________ _____________________

_________________________________ ___________________________ ______________________

(To record research and development costs)

_________________________________ ____________________________ _________________________

__________________________________ ______________________________ ______________________________

(To record legal and administration costs)

_________________________________ ________________________________ _____________________________

__________________________________ ___________________________________ ________________________________

(to record one year's amortization expenses)

In 2018, the company successfully defends the patent in extended litigation at cost of $ 58,400, thereby extending the patent life to December 31, 2025. What is the proper way to account for this cost? Also, record patent amortization ( full year) in 2018.

Account Titles and Explanation Debit Credit

__________________________________ ______________________ _____________________

______________________________ _________________________ ______________________

(To record legal cost of Successfully defending patent)

_____________________________ ______________________________ ___________________

_______________________________ __________________________ ______________________________

(To record one year's amortization)