The following information concerns the intangible assets of Baez Corporation:

On June 30, 2024, Baez completed the acquisition of the Johnstone Corporation for $2,000,000 in cash. The fair value of the net identifiable assets of Johnstone was $1,700,000.

Included in the assets purchased from Johnstone was a patent that was valued at $80,000. The remaining legal life of the patent was 13 years, but Baez believes that the patent will only be useful for another eight years.

Baez acquired a franchise on October 1, 2024, by paying an initial franchise fee of $200,000. The contractual life of the franchise is 10 years.

Required:

Prepare year-end adjusting journal entries to record straight-line amortization expense of the intangibles at December 31, 2024.

Prepare the intangible asset section of the December 31, 2024, balance sheet.