Question
On December 1, 2021, the accounting department receives the latest report from the Pilot Automation System department. The report claims that a new wireless operating
On December 1, 2021, the accounting department receives the latest report from the Pilot Automation System department. The report claims that a new wireless operating system had achieved technological feasibility. VV has spent $800,000 on this system in 2021. The technological feasibility judgment is based on the company's own engineer expert group. There is no official technical criterion currently available for technological feasibility. The original goal for this Pilot Automation System is a patent, but the management is now considering this system as internally developed software. VV spends $300,000 this month after passing the technological feasibility. Based on the given information, you are required to determine whether this system is a patent or software and decide to capitalize the $300,000 (the capitalization can be amortized within ten years) or record it as an R&D expense.
How would I record this in a journal entry for both capitilization or the expense?
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