Reference no: EM132619192

Petal Powerwash is a company that does home maintenance services. On January 2, 2020, the company developed a trademark for $15,000 to promote its work. After a few months of consumer testing, on April 1, the company was confident that the trademark would be well received by the public and would increase revenue for the company so they registered the trademark at a cost of $8,000. The registration lasts for 15 years before requiring renewal and Petal plans to continue to renew it indefinitely.

• On January 1, 2020, Petal also acquired a patent for a special cleaning process for $12,000 with a remaining legal life on that date of 16 years. On July 1, 2020, the company paid $6,200 in legal fees to successfully defend its use of the patent, as it had been challenged by an old competitor.
• On December 31, 2020, Petal had its intangible assets valued and found that fair value was equal to the maximum carrying amount for all of its intangible assets under the cost model. Petal uses the cost model to account for the assets.

Required

Problem 1: Prepare all journal entries required for Petal's trademark for the year ended December 31, 2020.

Problem 2: Prepare all journal entries required for Petal's patent for the year ended December 31, 2020.