On December 31, it was estimated that goodwill of $4,000,000 was impaired. In addition, a patent with an estimated useful economic life of 15 years was acquired for $900,000 on August 1.

Required:

A.Journalize the adjusting entry on December 31 for the impaired goodwill. Refer to the Chart of Accounts for exact wording of account titles.

B.Journalize the adjusting entry on December 31 for the amortization of the patent rights. Refer to the Chart of Accounts for exact wording of account titles.

CHART OF ACCOUNTS

ASSETS

110Cash

111Petty Cash

112Accounts Receivable

114Interest Receivable

115Notes Receivable

16Merchandise Inventory

117Supplies

119Prepaid Insurance

120Land

123Delivery Truck

124Accumulated Depreciation-Delivery Truck

125Equipment

126Accumulated Depreciation-Equipment

130Mineral Rights

131Accumulated Depletion

132Goodwill

133Patents

LIABILITIES

210Accounts Payable

211Salaries Payab

213Sales Tax Payable

214Interest Payable

215Notes Payable

EQUITY

310Owner, Capital

311Owner, Drawing

312Income Summary

REVENUE

410Sales

610Interest Revenue

620Gain on Sale of Delivery Truck

621Gain on Sale of Equipment

622Gain on Sale of Patent

623Gain on Sale of Goodwill

EXPENSES

510Cost of Merchandise Sold

520Salaries Expense

521Advertising Expense

522Depreciation Expense-Delivery Truck

523Delivery Expense

524Repairs and Maintenance Expense

529Selling Expenses

531Rent Expense

532Depreciation Expense-Equipment

533Depletion Expense

534Amortization Expense-Patents

535Insurance Expense

536Supplies Expense

539Miscellaneous Expense

710Interest Expense

720Loss on Sale of Delivery Truck

721Loss on Sale of Equipment

722Loss on Sale of Patent

723Loss from Impaired Goodwill