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3 December, 02:18

Ayayai Corporation purchases a patent from Blossom Company on January 1, 2020, for $40,000. The patent has a remaining legal life of 12 years. Ayayai feels the patent will be useful for 10 years. Prepare Ayayai's journal entries to record the purchase of the patent and 2020 amortization

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  1. 3 December, 04:08
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    The journal entries are shown below:

    1. Patent A/c Dr $40,000

    To Cash A/c $40,000

    (Being patent is purchase in cash is recorded)

    2. Amortization expense A/c Dr $4,000

    To Patent A/c $4,000

    (Being amortization expense is recorded)

    The computation is shown below:

    = Patent : useful life

    = $40,000 : 10 years

    = $4,000
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Home » Business » Ayayai Corporation purchases a patent from Blossom Company on January 1, 2020, for $40,000. The patent has a remaining legal life of 12 years. Ayayai feels the patent will be useful for 10 years.
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