question 7

7. Merging Art Corporation purchased 2 copyrights for cash during 2020. The first copyright was 8 marks purchased on February 1 for $18,550 and was expected to have a useful life lasting until the end of December 2022. The second copyright was purchased on July 1 for $110,400 and was expected to have an indefinite useful life. Merging Art's fiscal year end was December 31. On January 1, 2021, Merging Art paid $7,740 in legal fees to successfully defend the first copyright in court. On January 1, 2021, Merging Art determined that the second copyright would no longer have an indefinite useful life, and in fact would have a useful life of another 8 years, beginning January 1, 2021. REQUIRED: Prepare the journal entries on the books of Merging Art to record each transaction and adjusting journal entry for 2020 and 2021. Assume that Merging Art follows ASPE