Question

Pharoah Company, organized in 2019, has set up a single account for all intangible assets. The following summary discloses the debit entries that have been recorded during 2020.

1/2/20		Purchased patent (7-year life)		$304,500
4/1/20		Purchase goodwill (indefinite life)		345,000
7/1/20		Purchased franchise with 10-year life; expiration date 7/1/30		425,000
8/1/20		Payment of copyright (5-year life)		150,000
9/1/20		Research and development costs		215,000
				$1,439,500

Prepare the necessary entry to clear the Intangible Assets account and to set up separate accounts for distinct types of intangibles. (Credit account titles are automatically indented when amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts.)

Account Titles and Explanation	Debit	Credit
enter an account title	enter a debit amount	enter a credit amount
enter an account title	enter a debit amount	enter a credit amount
enter an account title	enter a debit amount	enter a credit amount
enter an account title	enter a debit amount	enter a credit amount
enter an account title	enter a debit amount	enter a credit amount
enter an account title	enter a debit amount	enter a credit amount

Make the entry as of December 31, 2020, recording any necessary amortization. (Credit account titles are automatically indented when amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts.)

Account Titles and Explanation	Debit	Credit
enter an account title	enter a debit amount	enter a credit amount
enter an account title	enter a debit amount	enter a credit amount
enter an account title	enter a debit amount	enter a credit amount
enter an account title	enter a debit amount	enter a credit amount

Reflect all balances accurately as of December 31, 2020.

Use straight-line amortization
select an intangible asset

		$enter a dollar amount
select an intangible asset

		$enter a dollar amount
select an intangible asset

		$enter a dollar amount
select an intangible asset

		$enter a dollar amount

Answer 1

1
Account Titles and Explanation	Debit	Credit
Patents	304500
Goodwill	345000
Franchises	425000
Copyrights	150000
Research and Development Expense	215000
Intangible Assets		1439500
2
Account Titles and Explanation	Debit	Credit
Amortization Expense	77250
Patents		43500	=304500/7
Franchise		21250	=425000/10*6/12
Copyright		12500	=150000/5*5/12
3
Use straight-line amortization
Patents	261000		=304500-43500
Goodwill	345000
Franchise	403750		=425000-21250
Copyright	137500		=150000-12500