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Provide accounting journal entries for the transactions

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Reference no: EM133011441

Question - EasyConnect Ltd is a telecommunication company and you are working as an accountant for the firm. The firm incurred the following expenditure during the year to 30 June 2022, and all payment are paid in cash.

1 July 2021 Acquired a patent for $1.2million. The patent has ten years left to run at the date of acquisition. There is no residual value after ten years. The firm uses the number of useful years as a basis for amortization.

1 December 2021 Paid $6 million to acquire a franchise to support broadband communication in remote areas. The are many similar franchises in the market. At the end of the financial year, the market price of the franchise is $6.1 million.

30 June 2021 The company has spent significant amount of money in training its workforce and managing its customers and suppliers. The Board of EasyConnect estimates that this has generated goodwill in the business of $5 million.

Required -

(a) Where appropriate, provide accounting journal entries for the above transactions. [Narrations are not required]

(b) Discuss and justify your response in part (a) in accordance with AASB 138 'Intangible Assets'.

Reference no: EM133011441

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