Prepare the necessary entries to clear the intangible

Reference no: EM13483673

Reichenbach Co., organized in 2011, has set up a single account for all intangible assets. The following summary discloses the debit entries that have been recorded during 2012 and 2013.

Intangible Assets

7/1/12 8-year franchise; expiration date 6/30/19 $58,160

10/1/12 Advance payment on laboratory space (2-year lease) 26,600

12/31/12 Net loss for 2011 including state incorporation fee, $2,090, and related legal fees of organizing, $5,710 (all fees incurred in 2011) 16,290

1/2/13 Patent purchased (10-year life) 82,690

3/1/13 Cost of developing a secret formula (indefinite life) 79,190

4/1/13 Goodwill purchased (indefinite life) 279,340

6/1/13 Legal fee for successful defense of patent purchased above 19,090

9/1/13 Research and development costs 150,100

Prepare the necessary entries to clear the Intangible Assets account and to set up separate accounts for distinct types of intangibles. Make the entries as of December 31, 2013, recording any necessary amortization and reflecting all balances accurately as of that date. (Ignore income tax effects.)

Reference no: EM13483673

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