P10-7A

P10-7A The intangible assets section of Sappelt Company at December 31, 2017, is sented below. $63,000 Patents ($70,000 cost less $7,000 amortization) Franchises ($48,000 cost less $19.200 amortization)28.800 $91.800 Total The patent was acquired in January 2017 and has a useful life of 10 years. The franchise was acquired in January 2014 and also has a useful life of 10 years. The following cash transactions may have affected intangible assets during 2018. Paid $27,000 legal costs to successfully defend the patent against infringement by another company Jan. 2 Jan.-June Developed a new product, incurring $140,000 in research and development costs. A patent was granted for the product on July 1. Its useful life is equal to its legal life. Sept. 1 Paid $50,000 to an extremely large defensive lineman to appear in mmercials advertising the company's products. The commercials will air in September and October. Oct. 1 Acquired a franchise for $140,000. The franchise has a useful life of 50 years. Instructions (a) Prepare journal entries to record the transactions above. (b) Prepare journal entries to record the 2018 amortization expense. (c) Prepare the intangible assets section of the balance sheet at December 31, 2018