Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Instruments Inc. has the following information available. On January 1 , 2 0 2 5 , the company purchased a copyright for $ 5 4

Instruments Inc. has the following information available.
On January 1,2025, the company purchased a copyright for $54,000. It is estimated to have a 9-year life.
On May 1,2025, legal fees for the successful defense of the copyright purchased on January 1,2025, were $21,000.
The company uses the straight-line method of amortization and has a December 31 year-end.
Required: Related to the intangible asset, compute and answer the following.
a. Prepare the journal entry to record the purchase of the copyright on January 1,2025. If "No Entry" is needed, please indicate "No Entry".
\table[[Reference:,Account Title,Debit:,Credit:],[11?25,Purchases,54000,type your answer...],[,Cash,type your answer...,54000]]
b. Prepare the journal entry to record the $21,000 expenditure on May 1,2025. If "No Entry" is needed, please indicate "No Entry".
\table[[Reference:,Account Title,Debit:,Credit:],[51?25,Cash,21000,type your answer...],[,Expenditure,type your answer...,21000]]
c. Prepare the journal entry to record the 2025 amortization on December 31,2025. If "No Entry" is needed, please indicate "No Entry".
\table[[Reference:,Account Title,Debit:,Credit:],[1231?25,Amoritization Expense,8333,type your answer...],[,Accumulated Amoritizat,type your answer...,8333]]
d. At December 31,2026, an impairment test is performed on the copyright purchased in 2025. It is estimated that the net cash flows to be received from the be $58,640, and its fair value is $55,290. The accumulated amortization at the end of 2026 was $14,200. Prepare the journal entry (if any) to record the impai December 31,2026. If "No Entry" is needed, please indicate "No Entry".
\table[[Reference:,Account Title,Debit:,Credit:],[1231?26,Impairment Loss,2466,type your answer...],[,Accumulated amoritizati,type your answer...,]]
image text in transcribed

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Financial Accounting An Introduction

Authors: Jacqui Kew, Alex Watson

4th Edition

0199046484, 978-0199046485

More Books

Students also viewed these Accounting questions

Question

Multiply in the base indicated. 1A316 1216

Answered: 1 week ago