FINANCIAL ACCOUNTING
10th Edition
ISBN: 9781259964947
Author: Libby
Publisher: MCG
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Transcribed Image Text:The intangible assets section of Novak Corporation's balance sheet at December 31, 2025, is presented here.
Patents ($78,000 cost less $7,800 amortization)
Copyrights ($46,800 cost less $32,760 amortization)
Total
$70,200
14,040
$84,240
The patent was acquired in January 2025 and has a useful life of 10 years. The copyright was acquired in January 2019 and also has a useful life of 10 years. The following cash transactions may have affected intangible assets during 2026.
Jan. 2
Jan.-June
Sept. 1
Oct. 1
Paid $60,840 legal costs to successfully defend the patent against infringement by another company.
Developed a new product, incurring $299,000 in research and development costs. A patent was granted for the product on July 1, and its useful life is equal to its legal life. Legal and other costs for the patent were $26,400.
Paid $52,000 to a quarterback to appear in commercials advertising the company's products. The commercials will air in September and October.
Acquired a copyright for $258,000. The copyright has a useful life and legal life of 50 years.
Prepare journal entries to record the transactions. (List debit entry before credit entry Record entries in the order displayed in the problem statement. Credit account titles are automatically indented when amount is entered. Do not indent manually. If no
Date
Account Titles and Explanation
Debit
Credit
eTextbook and Media
List of Accounts
Prepare journal entries to record the 2026 amortization expense for intangible assets. (List debit entry before credit entry. Credit account titles are automatically indented when amount is entered. Do not indent manually. If no entry is required, select "
Date
Account Titles and Explanation
Debit
Credit
(To record amortization of patents)
(To record amortization of copyrights)
eTextbook and Media
List of Accounts
Prepare the intangible assets section of the balance sheet at December 31, 2026.
Novak Corporation
Balance Sheet (Partial)
$
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