Question

On January 1, 2022, Pharoah Company had a balance of $395,500 of goodwill on its balance sheet that resulted from the purchase of a small business in a prior year. The goodwill had an indefinite life. During 2022, the company had the following additional transactions. 

Jan. 2 Purchased a patent (7-year life) $351,750. 

July 1 Acquired a 10-year franchise; expiration date July 1, 2,032, $604,800. 

Sept. 1Research and development costs $177,000.  

(a) Prepare the necessary entries to record the transactions related to intangibles. All costs incurred were for cash. (Record entries in the order displayed in the problem statement. Credit account titles are automatically indented when the 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.) 

Answer 1

ANSWER

Date	Account Titles and Explanation	Debit	Credit
Jan 2	Patent	351,750
	Cash		351,750
July 1	Franchise	604,800
	Cash		604,800
Sept 1	Research and development expense	117,000
	Cash		117,000