The following information concerns the intangible assets of Baez Corporation: On June 30, 2024, Baez completed the acquisition of the Johnstone Corporation for $1,580,000 in cash. The fair value of the net identifiable assets of Johnstone was $1,350,000. Included in the assets purchased from Johnstone was a patent that was valued at $60,200. The remaining legal life of the patent was 12 years, but Baez believes that the patent will only be useful for another seven years. Baez acquired a franchise on October 1, 2024, by paying an initial franchise fee of $154,800. The contractual life of the franchise is 9 years. Required: Prepare year-end adjusting journal entries to record straight-line amortization expense of the intangibles at December 31, 2024. Prepare the intangible asset section of the December 31, 2024, balance sheet
The following information concerns the intangible assets of Baez Corporation: On June 30, 2024, Baez completed the acquisition of the Johnstone Corporation for $1,580,000 in cash. The fair value of the net identifiable assets of Johnstone was $1,350,000. Included in the assets purchased from Johnstone was a patent that was valued at $60,200. The remaining legal life of the patent was 12 years, but Baez believes that the patent will only be useful for another seven years. Baez acquired a franchise on October 1, 2024, by paying an initial franchise fee of $154,800. The contractual life of the franchise is 9 years.
Required:
Prepare year-end
Prepare the intangible asset section of the December 31, 2024, balance sheet.
Trending now
This is a popular solution!
Step by step
Solved in 4 steps
