The intangible assets reported by Ip Company at December 31, 2016, follow: Patent #1 was acquired in

Question:

The intangible assets reported by Ip Company at December 31, 2016, follow:

Patent #1 was acquired in January 2015 and has an estimated useful life of 10 years. Copyright #1 was acquired in January 2008 and also has an estimated useful life of 10 years. The following cash transactions may have affected intangible assets and goodwill during the year 2017:
Jan. 2 Paid $23,200 of legal costs to successfully defend Patent #1 against infringement by another company.
June 30 Developed a new product, incurring $180,000 in research costs and $60,000 in development costs, which were paid in cash. The development costs were directly related to Patent #2, which was granted for the product on July 1. Its estimated useful life is equal to its legal life of 20 years.
Sept. 1 Paid $12,000 to an Olympic athlete to appear in commercials advertising the company's products. The commercials will air in September.
Oct. 1 Acquired a second copyright for $18,000 cash. Copyright #2 has an estimated useful life of six years.
Instructions
(a) Record the above transactions.
(b) Prepare any adjusting journal entries required at December 31, 2017, the company's year end, and update the account balances.
(c) Show how the intangible assets and goodwill will be reported on the balance sheet at December 31, 2017.
Taking It Further
Since intangible assets do not have physical substance, why are they considered to be assets?

Goodwill
Goodwill is an important concept and terminology in accounting which means good reputation. The word goodwill is used at various places in accounting but it is recognized only at the time of a business combination. There are generally two types of... Intangible Assets
An intangible asset is a resource controlled by an entity without physical substance. Unlike other assets, an intangible asset has no physical existence and you cannot touch it.Types of Intangible Assets and ExamplesSome examples are patented... Balance Sheet
Balance sheet is a statement of the financial position of a business that list all the assets, liabilities, and owner’s equity and shareholder’s equity at a particular point of time. A balance sheet is also called as a “statement of financial...