miracle printers (MP) manufactures printers. Assume that MP Recently paid $300,000 for a patent on a new laser printer. Although it gives legal protection for 20 years, the patent is expected to provide a competitive advantage for only eight years.

after using the patent for four years MP learns at an industry trade show that another company is designing a more efficient printer. On the basis of this new information, MP decides, starting with year five, to amortize the remaining cost of the patent over two remaining years, giving the patent a total useful life of six years. Record amortizarion of year five.

* Requirements 1. Assuming the straight-line method of amortization, make journal entries to record (a) the purchase of the patent and (b) amortization for the first full year. 2. After using the patent for four years, MP learns at an industry trade show that another company is designing a more efficient printer. On the basis of this new information, MP decides, starting with Year 5, to amortize the remaining cost of the patent over two remaining years, giving the patent a total useful life of six years. Record amortization for Year 5. (a) Record the purchase of the patent Date Accounts and Explanation Debit Credit (b) Record the amortization for the first full year. Date Accounts and Explanation Debit Credit Date Accounts and Explanation Debit Credit |