Martinez, Inc. acquired a patent on January 1, 2014 for $40,000 cash. The patent was estimated to have a useful life of 10 years. At the end of 2016 it appeared that the total useful life would be only 7 years and the amortization rate was revised accordingly. On June 30, 2018, the patent was sold for $20,000. (If no entry is required for a transaction/event, select "No Journal Entry Required" in the first account field.)

Record the acquisition of the patent for $40,000 on January 1,2014.