(MP) manufactures printers. Assume that MP recently paid $900,000 for a patent on a new laser printer. Although it gives legal protection for 20 years, the patent is expected to provide a competitive advantage for only teight years.

Requirements 1. Assuming the straight-line method ofamortization, make journal entries to record (a) the purchase of the patent and (b) amortization for the first full year. 2. After using the patent for fourfour years, MP learns at an industry trade show that another company is designing a more efficient printer. On the basis of this new information, MP decides, starting with year 55, to amortize the remaining cost of the patent over two remaining years, giving the patent a total useful life of sixsix years. Record amortization for year 55.

Requirement 1. Assuming the straight-line method ofamortization, make journal entries to record (a) the purchase of the patent and (b) amortization for the first full year. (Record debits first, then credits. Select the explanation on the last line of the journal entry table.) (a) Record the purchase of the patent. Date Accounts and Explanation Debit Credit Patent 900000 Cash 900000 To record purchase of patent. (b) Record the amortization for the first full year. Date Accounts and Explanation Debit Credit Amortization Expense—Patent 45000 Patent 45000 To record amortization of patent. Requirement 2. After using the patent for fourfour years, MP learns at an industry trade show that another company is designing a more efficient printer. On the basis of this new information, MP decides, starting with year 55, to amortize the remaining cost of the patent over two remaining years, giving the patent a total useful life of sixsix years. Record amortization for year 55. (Record debits first, then credits. Select the explanation on the last line of the journal entry table.) Date Accounts and Explanation Debit Credit Amortization Expense—Patent 360000 Patent 360000 To record amortization of patent.