(Answered) Question - the intangible assets section of redeker company

Accounting

Question - The intangible assets section of Redeker Company at December 31, 2008, is presented below.

Patent ($70,000 cost less $7,000 amortization) $63,000

Franchise ($48,000 cost less $19,200 amortization) 28,800

Total $91,800

The patent was acquired in January 2008 and has a useful life of 10 years. The franchise was acquired in January 2005 and also has a useful life of 10 years.The following cash transactions may have affected intangible assets during 2009.

Jan. 2 Paid $45,000 legal costs to successfully defend the patent against infringement by another company.

Jan.-June Developed a new product, incurring $140,000 in research and development costs. A patent was granted for the product on July 1. Its useful life is equal to its legal life.

Sept. 1 Paid $50,000 to an extremely large defensive lineman to appear in commercials advertising the company's products. The commercials will air in September and October.

Oct. 1 Acquired a franchise for $100,000.The franchise has a useful life of 50 years.

Instructions

(a) Prepare journal entries to record the transactions above.

(b) Prepare journal entries to record the 2009 amortization expense.

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