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Please help fill in the red boxes. As the recently appointed auditor for Ayayai Corporation, you have been asked to examine selected accounts before the
Please help fill in the red boxes.
As the recently appointed auditor for Ayayai Corporation, you have been asked to examine selected accounts before the 6-month financial statements of June 30, 2020, are prepared. The controller for Ayayai Corporation mentions that only one account is kept for intangible assets. The account is shown below. Intangible Assets Debit Credit Balance Jan. 4 Research and development costs 952,000 952,000 Jan. 5 Legal costs to obtain patent 77,280 1,029,280 Jan. 31 Payment of 7 months' rent on property leased by Ayayai 84,700 1,113,980 Feb. 11 Premium on common stock 252,000 861,980 March 31 Unamortized bond discount on bonds due March 31, 2040 136,800 998,780 April 30 Promotional expenses related to start-up of business 209,200 1,207,980 June 30 Operating losses for first 6 months 255,000 1,462,980 Prepare the entries necessary to correct this account. Assume that the patent has a useful life of 10 years. (Credit account titles are automatically indented when amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter O for the amounts.) Account Titles and Explanation Debit Credit Research and Development Expense Patents Rent Expense Prepaid Rent Advertising Expense Retained Earnings Discount on Bonds Payable Interest Expense Paid-in Capital in Excess of Par - Common Stock Patents Rent Expense Prepaid Rent Advertising Expense Retained Earnings Discount on Bonds Payable Interest Expense Paid-in Capital in Excess of Par - Common Stock DON TO II Intangible Assets (To correct the account) Amortization Expense Patents (To record amortiztion expense)Step by Step Solution
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