Crane Company has provided information on intangible assets as follows. A patent was purchased from Larkspur Company for $1,850,000 on January 1, 2019. Crane estimated the remaining useful life of the patent to be 10 years. The patent was carried in Larkspurs accounting records at a net book value of $1,850,000 when Larkspur sold it to Crane. During 2020, a franchise was purchased from Blue Company for $490,000. In addition, 5% of revenue from the franchise must be paid to Blue. Revenue from the franchise for 2020 was $2,490,000. Crane estimates the useful life of the franchise to be 10 years and takes a full years amortization in the year of purchase. Crane incurred research and development costs in 2020 as follows.

Materials and equipment		$152,000
Personnel		201,000
Indirect costs		119,000
		$472,000

Crane estimates that these costs will be recouped by December 31, 2023. The materials and equipment purchased have no alternative uses. On January 1, 2020, because of recent events in the field, Crane estimates that the remaining life of the patent purchased on January 1, 2019, is only 5 years from January 1, 2020.

(a) Prepare the intangible assets section of Crane's balance sheet at December 31, 2020 (enter account name only and do not provide descriptive information).

(b) Prepare the income statement effect (related to expenses) for the year ended December 31, 2020, as a result of the facts above. (Enter account name only and do not provide descriptive information.)