Wildhorse Co. purchases a patent for $333,000 on January 2, 2019. Its estimated useful life is 10 years. Prepare the journal entry to record amortization expense for the first year. (Credit account titles are automatically indented when amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts.)

Debit Amortization expense $33,300

Credit Accumulated amortization $33,300

(To record amortization expense for the first year)

Explanation:

Using the straight-line amortization, the applicable formula is: Cost / Estimated useful life

Amortization = $333,000 / 10 years = $33,300

The accumulated amortization and the amortization expense will be the same in the first year. So, the net book value of the patent is $333,000 - $33,300 = $299,700