PEI Ltd. purchased a copyright on a new book series about the history of the Great Lakes in Ontario for $15,000 cash on August 1, 2020. PEI expects these books to have a saleable life of three years. One year later, on August 1, 2021, the company paid $6,000, successfully defending the copyright in court. The company's year end is July 31 and it prepares adjusting entries annually. Instructions Record the following journal entries: a) the purchase of the copyright on August 1, 2020. b) the amortization at July 31, 2021 c) the legal costs incurred on August 1, 2021.
PEI Ltd. purchased a copyright on a new book series about the history of the Great Lakes in Ontario for $15,000 cash on August 1, 2020. PEI expects these books to have a saleable life of three years. One year later, on August 1, 2021, the company paid $6,000, successfully defending the copyright in court. The company's year end is July 31 and it prepares adjusting entries annually. Instructions Record the following journal entries: a) the purchase of the copyright on August 1, 2020. b) the amortization at July 31, 2021 c) the legal costs incurred on August 1, 2021.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Please show calculations, thank you.
Transcribed Image Text:PEI Ltd. purchased a copyright on a new book series about the history of the Great
Lakes in Ontario for $15,000 cash on August 1, 2020. PEI expects these books to have
a saleable life of three years. One year later, on August 1, 2021, the company paid
$6,000, successfully defending the copyright in court. The company's year end is July
31 and it prepares adjusting entries annually.
Instructions
Record the following journal entries:
a) the purchase of the copyright on August 1, 2020.
b) the amortization at July 31, 2021
c) the legal costs incurred on August 1, 2021.
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