value: 2.00 points In 2016, Space Technology Company modified its model Z2 satellite to incorporate a new communication device. The company made the following expenditures Basic research to develop the technology Engineering design work Development of a prototype device Acquisition of equipment Testing and modification of the prototype Legal and other fees for patent application on the new communication system Legal fees for success $2,600,000 800,000 420,000 72,000 320,000 52,000 32,000 ful defense of the new patent $4,296,000 Total The equipment will be used on this and other research projects. Depreciation on the equipment for 2016 is $22,000 During your year-end review of the accounts related capitalized all of the above as costs of the patent. Management contends that the device simply represents an improvement of the existing communication system of the satellite and, therefore, should be capitalized to intangibles, you discover that the company h as Required Prepare correcting entries that reflect the appropriate treatment of the expenditures. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.) View transaction list View journal entry worksheet X: Credit Debit Import a new list 1 Record the correcting entry to expense R&D costs incorrectly capitalized 2 Record the correcting entry to capitalize the cost of equipment incorrectly capitalized as a patent. 3 Record the correcting entry to record depreciation on equipment used in R&D projects