Retained Earnings were not 5600

Sandhill Co., organized in 2019, has set up a single account for all intangible assets. The following summary discloses the debit entries that have been recorded during 2020 and 2021. 7/1/20 $36,000 28,200 10/1/20 12/31/20 Intangible Assets 8-year franchise; expiration date 6/30/28 Advance payment on laboratory space (2-year lease) Net loss for 2020 including state incorporation fee, $1,500, and related legal fees of organizing, $5,500 (all fees incurred in 2020) Patent purchased (10-year life) Cost of developing a secret formula (indefinite life) Goodwill purchased (indefinite life) Legal fee for successful defense of patent purchased above Research and development costs 1/2/21 3/1/21 4/1/21 12,600 83,000 73,000 277,200 13,340 142,000 6/1/21 9/1/21 Prepare the necessary entries to clear the Intangible Assets account and to set up separate accounts for distinct types of intangibles. Make the entries as of December 31, 2021, recording any necessary amortization. (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.) Prepare the necessary entries to clear the Intangible Assets account and to set up separate accounts for distinct types of intangibles. Make the entries as of December 31, 2021, recording any necessary amortization. (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 Franchises 36,000 Prepaid Rent 28,200 Retained Earnings 5600 Patents 96340 Research and Development Expense 215000 Goodwill 277,200 Intangible Assets 666840 (To clear the Intangible Assets) Amortization Expense 4500 Retained Earnings 2250 Franchises 6750