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The following information concerns the intangible assets of Epstein Corporation: On June 30, 2021, Epstein completed the acquisition of the Johnstone Corporation for $1,760,000 in
The following information concerns the intangible assets of Epstein Corporation:
- On June 30, 2021, Epstein completed the acquisition of the Johnstone Corporation for $1,760,000 in cash. The fair value of the net identifiable assets of Johnstone was $1,500,000.
- Included in the assets purchased from Johnstone was a patent that was valued at $64,400. The remaining legal life of the patent was 12 years, but Epstein believes that the patent will only be useful for another seven years.
- Epstein acquired a franchise on October 1, 2021, by paying an initial franchise fee of $165,600. The contractual life of the franchise is 9 years.
Required:
1a. Prepare year-end adjusting journal entries to record amortization expense on the intangibles at December 31, 2021. ((Do not round intermediate calculations.). If no entry is required for a transaction/event, select "No journal entry required" in the first account field.)
- Record the goodwill amortization.
- Record the amortization of patent.
- Record the amortization of franchise. 1b. Prepare the intangible asset section of the December 31, 2021, balance sheet. (Do not round intermediate calculations.)
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