Question
During 2013, Ayayai Corporation spent $175,680 in research and development costs. As a result, a new product called the New Age Piano was patented. The
During 2013, Ayayai Corporation spent $175,680 in research and development costs. As a result, a new product called the New Age Piano was patented. The patent was obtained on October 1, 2013, and had a legal life of 20 years and a useful life of 10 years. Legal costs of $49,680 related to the patent were incurred as of October 1, 2013.
Prepare all journal entries required in 2013 and 2014 as a result of the transactions above. (Round answers to 0 decimal places, e.g. 8,564. Credit account titles are automatically indented when amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts.)
Date Account Titles and Explanation Debit Credit earch and Development Expense 175,680 Patents Cash 175,680 (To record research and development expenses) 2013 Patents 49,680 Cash 49,680 (To record legal expenses) 2013 Amortization Expense 1242 Patents 1242 (To record amortization expense) 2014 Amortization Expense 4968 Patents 4968 On June 1, 2015, Ayayai spent $40,320 to successfully prosecute a patent infringement suit. As a result, the estimate of useful life was extended to 12 years from June 1, 2015. Prepare all journal entries required in 2015 and 2016. (Round answers to 0 decimal places, e.g. 8,564. Credit account titles are automatically indented when amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts.) Date Account Titles and Explanation Debit Credit 2015 Patents 40,320 Cash 40,320 (To record patents) 2015 Amortization Expense 4531 Patents 4531 (To record amortization expense) 2016Amortization Expense 6843 Patents 6843 In 2017, Ayayai determined that a competitor's product would make the New Age Piano obsolete and the patent worthless by December 31, 2018. Prepare all journal entries required in 2017 and 2018. (Round answers to O decimal places, e.g. 8,564. Credit account titles are automatically indented when amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts.) Account Titles and Explanation Debit Credit Amortization Expense 37,364 Patents 37,364
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