Your answer is partially correct. Cullumber Company purchased a patent on January 1, 2025 for $2,650,000. The patent's legal life is 20 years but the company estimates that the patent's useful life will only be 5 years from the date of acquisition. On June 30, 2025, the company paid legal costs of $171,720 in successfully defending the patent in an infringement suit. Prepare the journal entry to amortize the patent at year-end on December 31, 2025. (If no entry is required, select "No Entry" for the account titles and enter O for the amounts. Credit account titles are automatically indented when the amount is entered. Do not indent manually. List all debit entries before credit entries.) Date December 31, 2025 Account Titles and Explanation Amortization Expense Patents Debit 701720 Credit 701720
Your answer is partially correct. Cullumber Company purchased a patent on January 1, 2025 for $2,650,000. The patent's legal life is 20 years but the company estimates that the patent's useful life will only be 5 years from the date of acquisition. On June 30, 2025, the company paid legal costs of $171,720 in successfully defending the patent in an infringement suit. Prepare the journal entry to amortize the patent at year-end on December 31, 2025. (If no entry is required, select "No Entry" for the account titles and enter O for the amounts. Credit account titles are automatically indented when the amount is entered. Do not indent manually. List all debit entries before credit entries.) Date December 31, 2025 Account Titles and Explanation Amortization Expense Patents Debit 701720 Credit 701720
Intermediate Accounting: Reporting And Analysis
3rd Edition
ISBN:9781337788281
Author:James M. Wahlen, Jefferson P. Jones, Donald Pagach
Publisher:James M. Wahlen, Jefferson P. Jones, Donald Pagach
Chapter10: Property, Plant And Equipment: Acquisition And Subsequent Investments
Section: Chapter Questions
Problem 6RE
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Your answer is partially correct, costs of $171, 720 in successfully defending the patent in an infringement suit, manually. List all debit entries before credit entries.) Date Account Titles and Explanation December 31, 2025 Amortization Expense Patents Debit Credit Credit.
Transcribed Image Text:Your answer is partially correct.
Cullumber Company purchased a patent on January 1, 2025 for $2,650,000. The patent's legal life is 20 years but the company estimates that the patent's useful life will only be 5 years from the date of acquisition. On June 30, 2025, the company paid legal
costs of $171,720 in successfully defending the patent in an infringement suit.
Prepare the journal entry to amortize the patent at year-end on December 31, 2025. (If no entry is required, select "No Entry" for the account titles and enter O for the amounts. Credit account titles are automatically indented when the amount is entered. Do not indent
manually. List all debit entries before credit entries.)
Date
December 31, 2025
Account Titles and Explanation
Amortization Expense
Patents
Debit
701720
Credit
701720
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