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For each of the following unrelated situations, calculate the annual amortization expense and prepare a journal entry to record the expense:
a. A patent with a 15-year remaining legal life was purchased for $280,000. The patent will be commercially exploitable for another seven years.
b. A patent was acquired on a device designed by a production worker. Although the cost of the patent to date consisted of $44,100 in legal fees for handling the patent application, the patent should be commercially valuable during its entire remaining legal life of 18 years and is currently worth $378,000.
c. A franchise granting exclusive distribution rights for a new solar water heater within a three-state area for five years was obtained at a cost of $63,000. Satisfactory sales performance over the five years permits renewal of the franchise for another four years (at an additional cost determined at renewal).

Answer :

Answer:

Explanation:

Base on the scenario been described in the question, we use the following method prepare and slove the given problem

Solution to the problem is in file attached below

Option c will be

Base on this, the Cost of goods sold: $ 934

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