In January 2020, Ford Co. purchased a patent from a research institution for $450,000. The patent was estimated to have a useful life of 10 years. In December 2021, Ford Co. unsuccessfully defended the patent in legal proceedings. The fair value of the patent on December 31, 2021, is now estimated to be $90,000 with a 2-year useful life.

a. Record the entry for the legal fees of $36,000, paid in cash.

Account Name	Dr.	Cr.
CashNote ReceivableDiscount on Note ReceivableEquipmentAccumulated DepreciationFranchiseGoodwillPatentSoftware Intangible AssetTrademarkNote PayableDiscount on Note PayableCommon StockPaid-in Capital in Excess of ParCommon StockSales RevenueAmortization ExpenseLegal ExpenseOrganization ExpenseResearch and Development ExpenseSoftware Amortization ExpenseSoftware Development ExpenseGain on saleImpairment LossN/A
CashNote ReceivableDiscount on Note ReceivableEquipmentAccumulated DepreciationFranchiseGoodwillPatentSoftware Intangible AssetTrademarkNote PayableDiscount on Note PayableCommon StockPaid-in Capital in Excess of ParCommon StockSales RevenueAmortization ExpenseLegal ExpenseOrganization ExpenseResearch and Development ExpenseSoftware Amortization ExpenseSoftware Development ExpenseGain on saleImpairment LossN/A

b. Determine the carrying value of the patent on December 31, 2021, after any necessary adjusting entries have been recorded.

Carrying value of patent, Dec. 31, 2021