Prepare the entries required to reflect

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The Montgomery Company provided the following information on intangible assets:

(a) A patent was purchased for $1 million on June 30, 2011. Montgomery estimated the remaining useful life of the patent to be five years.

(b) During 2013, a franchise was purchased from the Taco Time Company for $40,000. The contractual life of the franchise is 20 years and Montgomery records a full year of amortization in the year of purchase.

(c) Effective January 1, 2013, based on new events that have occurred, Montgomery estimates that the remaining life of the patent is seven more years.

Prepare the entries required to reflect the above information for 2011 through 2013, including year-end adjusting entries to record amortization.

Reference no: EM131265054

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