Dynamo Manufacturing paid cash to acquire the assets of an existing company. Among the assets acquired were the following items.

Patent with 4 remaining years of legal life	$38,100
Goodwill	39,800

Dynamos financial condition just prior to the acquisition of these assets is shown in the following statements model.

Balance Sheet									Income Statement
Assets					=	Liabilities	+	Stockholders Equity	Revenue		Expenses	=	Net Income	Statement of Cash Flows
Cash	+	Patent	+	Goodwill
85,600	+	NA	+	NA	=	NA	+	85,600	NA		NA	=	NA	NA

Required

1. Compute the annual amortization expense for these items.
2. Show the acquisition of the intangible assets and the related amortization expense for Year 1 in a horizontal statements model.
3. Prepare the journal entries to record the acquisition of the intangible assets and the related amortization for year 1.