On January 4, 2013, Franc Company purchased for $27,000 a patent that had been filed 8 years earlier. The patent covers a manufacturing process that the company plans to use for 15 years. On January 3, 2014, the company paid its lawyers $10,000 for successfully defending the patent in a lawsuit. Required:.
Prepare all the journal entries associated with the patent in 2019 and 2020

depreciation expense 2,514.28 debit

              patent                   2,514.28 credit

--to record 2019 amortizationon patent--

depreciation expense 2,514.28 debit

              patent                   2,514.28 credit

--to record 2020 amortization on patent--

Explanation:

On 2013 the patent is amortized:

27,000 / 15 = 1,800

On 2014 as the defend is successfull we capitalized into the atent account which now has 14 year of useful life:

27,000 - 1,800 + 10,000 = 35,200 balance at Dec 31th 2014

amorization per year:

35,200 / 14 = 2.514,2857

We will do the amortization at this rate until a new defense arise or the patent market vale decrease.

We aret givne with any additional information thus, we have to record for 2019 and 2020 the 2,514 depreciation

answer$225.00;