Use information below for questions 1 and 2:

Company acquired a patent on July 1, Year 1. On date of acquisition, the patent had a remaining legal life of 12 years and a fair value of $120,000. Company made a cash payment of $20,000 and signed a 5-year, 6%, $80,000 note to acquire the patent. The note required five equal payments. Company believes that the product under patent was marketable for another 10 years from the date of acquisition.

Question 1: Determine the carrying value of the patent on December 13, Year 2.

Question 2: On January 1, Year 3, company revised its estimate of the patents life to be 12 years from the date of acquisition.

Determine the carrying value of the patent at December 31, Year 3.