The following information concerns the intangible assets of Epstein Corporation:
a. On June 30, 2021, Epstein completed the acquisition of the Johnstone Corporation for $1,580,000 in cash. The fair value of the net identifiable assets of Johnstone was $1,350,000.
b. Included in the assets purchased from Johnstone was a patent that was valued at $60,200. The remaining legal life of the patent was 12 years, but Epstein believes that the patent will only be useful for another seven years.
c. Epstein acquired a franchise on October 1, 2021, by paying an initial franchise fee of $154,800. The contractual life of the franchise is 9 years
Required:
1. Prepare year-end adjusting journal entries to record amortization expense on the intangibles at December 31, 2021.
2. Prepare the intangible asset section of the December 31, 2021, balance sheet.
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