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The intangible assets section of Sappelt Company at December 31, 2015, is presented below. Patents ($70,000 cost less $7,000 amortization) $63,000 Franchises ($48,000 cost less

The intangible assets section of Sappelt Company at December 31, 2015, is presented below.

Patents ($70,000 cost less $7,000 amortization)

$63,000

Franchises ($48,000 cost less $19,200 amortization)

28,800

Total

$91,800

The patent was acquired in January 2015 and has a useful life of 10 years. The franchise was acquired in January 2012 and also has a useful life of 10 years. The following cash transactions may have affected intangible assets during 2016.

Jan. 2

Paid $27,000 legal costs to successfully defend the patent against infringement by another company.

Jan.-June

Developed a new product, incurring $140,000 in research and development costs. A patent was granted for the product on July 1. Its useful life is equal to its legal life.

Sept. 1

Paid $50,000 to an extremely large defensive lineman to appear in commercials advertising the company's products. The commercials will air in September and October.

Oct. 1

Acquired a franchise for $140,000. The franchise has a useful life of 50 years.

A. Prepare journal entries to record the transactions above.

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