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Journal entries to record amortization expense on intangible

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Reference no: EM131930257

The following information concerns the intangible assets of Epstein Corporation:

a. On June 30, 2016, Epstein completed the acquisition of the Johnstone Corporation for $1,820,000 in cash. The fair value of the net identifiable assets of Johnstone was $1,550,000.

b. Included in the assets purchased from Johnstone was a patent that was valued at $84,600. The remaining legal life of the patent was 14 years, but Epstein believes that the patent will only be useful for another nine years.

c. Epstein acquired a franchise on October 1, 2016, by paying an initial franchise fee of $206,800. The contractual life of the franchise is 11 years.

Required:

1. Prepare year-end adjusting journal entries to record amortization expense on the intangibles at December 31, 2016. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.)

2. Prepare the intangible asset section of the December 31, 2016, balance sheet. (Do not round intermediate calculations.)

Reference no: EM131930257

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