P$10-6$ Accounting for intangibles $[15-20$ min$]($LO $6$ E$)$

Part $1.$ The balance sheet of ETS Tokvision reports intangble assets.

Assume that ETS purchasod the intangibles as part of the acquistion of

anuther business, which carried these fqures:

Requirements

Create the journal entry to record ETS's purchase of the other

business for $$1\mathrm{.}5$ milion, hat in cash and half try borruwing.

What spedal asset does ETS's acquisition of the othor business

identity? How should ETS account for this asset after acquring the

othor business? Explain in dotal.

Part $2.$ Now suppose that ETS subsoquently purchasod a toleve

Icence for $$330000.$ ETS also paid legal foes of $$12000$ for as:

the purchase. The franchise icence is for a period of nine years.

Requirement

Create the journal entries to rocord the franchise transactions,

including straight$-$Ine amortisation for one ywar.

P$10-7$ Reporting non$-$current asset transactions in the financial