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16 October, 07:00

Crane Company purchases a patent for $161,900 on January 2, 2022. Its estimated useful life is 5 years. (a) Prepare the journal entry to record amortization expense for the first year.

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  1. 16 October, 10:35
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    The journal entry is shown below:

    Amortization expense - Patent A/c Dr $32,380

    To Patent A/c $32,380

    (Being amortization expense for the first year is recorded)

    The computation is shown below"

    = Purchase cost of patent : estimated useful life

    = $161,900 : 5 years

    = $32,380

    For the intangible assets, the amortization expense is considered, not the depreciation expense and the same is to be taken.
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