Recording Entries and Reporting Intangibles Transactions during 2021, the first year of the newly organized J's Discount Foods Corporation, included the following. Jan. 2 Paid $8,000 attorney's fees and other related costs for assistance in securing the corporate charter, drafting bylaws, and advising on operating in other states (which the company intends to do). Jan. 31 Paid $2,000 for advertising the grand opening. In addition, during the grand opening the company gave away samples of its products, which were taken from inventory; cost $8,000 (perpetual system). Feb. 1 Paid an invoice received from the financial institution that underwrote the company's $400,000 per value stock at a 10% premium. Under the contract, the underwriter charged 1% of the gross proceeds from the stock sale. The stock issuance has already been recorded. Mar. 1 Paid $30,000 to a franchisor for the right to open a Tastee Food lunch counter on the counter's premises. The initial franchise runs 10 years from March 1 and can be renewed upon payment of a second amount to be computed later on the basis of sales under the initial franchise. May 1 Acquired a newly issued patent for $10,200 with a 20-year life. July 1 Paid $6,400 for registration to secure a trademark enabling the company to market under the now protected name J's Recipe. The trademark has an indefinite life. Oct. 1 obtained a license from the city to conduct operations in a newly opened department. The license, which cost $600, runs for one year and is renewable. Nov. 1 Acquired another business and paid (among other amounts) $36,000 for its goodwill. Journal Entries Financial Statement Presentation a. Provide the journal entry that J's should make for each of the above transactions. December 31 is the end of the annual accounting period; three adjusting entries are required on this date. Assume that qualitative assessment does not indicate impairment on any intangible assets held. Cr. 0 8,000 0 2,000 8,000 0 4,400 X 0 > Note: List multiple debits or credits (when applicable) in alphabetical order. Date Account Name Dr. Jan. 2, 2021 Organization Expense 8,000 Cash 0 Jan. 31, 2021 Promotion Expense 10,000 Cash 0 Inventory 0 Feb. 1, 2021 Paid-in Capital in Excess of ParCommon Stock 40,000 x Cash 0 March 1, 2021 Franchise 30,000 Cash 0 May 1, 2021 Patent 10,200 Cash 0 July 1, 2021 Trademark 6,400 Cash 0 Oct. 1, 2021 Prepaid License 600 Cash 0 Nov. 1, 2021 Goodwill 36,000 Cash 0 Dec 31, 2021 Amortization Expense 2,500 Franchise 0 To record amortization of the franchise Dec 31, 2021 Amortization Expense 510 x Patent 0 To record amortization of the patent Dec. 31, 2021 License Expense 600 x Prepaid License 0 To record expense related to the license 30,000 0 10,200 0 6,400 0 600 0 36,000 0 2,500 > 0 510 x > 0 600 x > Journal Entries Financial Statement Presentation b. Classify each of the intangible assets and their amounts) for balance sheet reporting at the end of 2021. Note: List intangible assets in alphabetical order. J's Discount Foods Balance Sheet, at December 31, 2021 Assets $ 0 x $ 0 x Current Assets Prepaid License Intangibles Franchise Goodwill Patent Trademark Total intangibles 0 x 0 x OX $ 0 X Check
