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Prepare journal entries | Accounting homework help

Paper Details

B. J. Bakery had the following transactions involving intangible assets:
Jan. 1 Purchased a patent for a new pastry for $10,000 and estimated its useful life to be 10 years.
Apr. 1 Purchased a copyright for a cookie cutter design for $5,000 with a life left on the copyright of 15 years. Estimated that the future remaining (economic) life of the copyright is five years.
July 1 Purchased a trademark at a cost of $40,000. The estimated economic life on the trademark is 20 years. However, conservatism suggests it should be written off in five years.
REQUIRED
1. Using the straight-line method, calculate the amortization of the patent, copyright, and trademark.
2. Prepare journal entries to record the end-of-year amortizations using a general journal.

Solution:

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