Question
The intangible assets and goodwill reported by Cullumber Corporation at December 31, 2020, follow: Copyrights (#1) $35,120 Less: Accumulated amortization 17,560 $ 17,560 Trademarks 54,660
The intangible assets and goodwill reported by Cullumber Corporation at December 31, 2020, follow:
Copyrights (#1) | $35,120 | ||||
Less: Accumulated amortization | 17,560 | $ 17,560 | |||
Trademarks | 54,660 | ||||
Goodwill | 121,020 | ||||
Total | $193,240 |
A copyright (#1) was acquired on January 1, 2019, and has a useful life of four years. The trademarks were acquired on January 1, 2017, and are expected to have an indefinite life. The company has a December 31 year end and prepares adjusting journal entries annually. The following cash transactions may have affected intangible assets and goodwill during 2021:
Jan. | 5 | Paid $6,300 in legal costs to successfully defend the trademarks against infringement by another company. | ||
July | 1 | Developed a new product, incurring $197,650 in research and $45,200 in development costs with probable future benefits. The product is expected to have a useful life of 20 years. | ||
Sept. | 1 | Paid $63,120 to a popular hockey player to appear in commercials advertising the companys products. The commercials will air in early September. | ||
Oct. | 1 | Acquired another copyright (#2) for $186,000. The new copyright has a useful life of six years. | ||
Dec. | 31 | Determined the fair value of the goodwill to be $84,220. There was no indication that the copyrights or trademarks were impaired. |
Prepare journal entries to record the above transactions. (List all debit entries before credit entries. Credit account titles are automatically indented when the amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts. Record journal entries in the order presented in the problem.)
Date | Account Titles and Explanation | Debit | Credit |
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