Instructions

On January 4, 2016, Franc Company purchased for $24,000 a patent that had been filed 8 years earlier. The patent covers a manufacturing process that the company plans to use for 15 years. On January 3, 2017, the company paid its lawyers $11,000 for successfully defending the patent in a lawsuit.

Required:

Prepare all the journal entries associated with the patent in 2016 and 2017.

Chart Of Accounts

CHART OF ACCOUNTS

Franc Company General Ledger

ASSETS

111 Cash

121 Accounts Receivable

141 Inventory

152 Prepaid Insurance

181 Equipment

189 Accumulated Depreciation

191 Patent

LIABILITIES

211 Accounts Payable

231 Salaries Payable

250 Unearned Revenue

261 Income Taxes Payable

EQUITY

311 Common Stock

331 Retained Earnings

REVENUE

411 Sales Revenue

EXPENSES

500 Cost of Goods Sold

511 Insurance Expense

512 Utilities Expense 521

Salaries Expense

532 Bad Debt Expense

533 Amortization Expense

540 Interest Expense

541 Depreciation Expense

559 Miscellaneous Expenses

910 Income Tax Expense

General Journal

Prepare all the journal entries associated with the patent in 2016 and 2017. Additional Instructions

Refer to the Chart of Accounts provided for the exact wording of the answer choices for text entries.

Round all calculations to the nearest dollar.

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GENERAL JOURNAL

DATE ACCOUNT TITLE POST. REF .DEBIT CREDIT

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