The time and cost required to manufacture its product R&D costs were $120,000. The process was patented. On July 1, 2016. Legal costs and fees to require the patent totaled $12,500. Browen estimated the useful life of the patent at 10 years.

On July 1,2018, Browen sold the nonexclusive right to use the new process to Kennedy Company for $90,000. Because Bowen retained the patent, the agreement allows Kennedy to use, but not sell, the new technology for a period of 5 years. But Bowen Company and Kennedy Company have December 31 fiscal years.

On July 1, 2020, another competitor obtained a patent on a new process that made Browen's patent obsolete.

1) How should Bowen Company account for the R&D costs and legal costs incurred to obtain the patent? Show the effects of these entries using the financial statement effects template, prepare the appropriate journal entries necessary to account for the costs incurred in 2016, and psot the entries to T-accounts