Principles of Accounting Volume 1
Principles of Accounting Volume 1
19th Edition
ISBN: 9781947172685
Author: OpenStax
Publisher: OpenStax College
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please provide correct answer General accounting question

Valley Tech Corporation purchased a patent from Nexus
Labs on January 1, 2022, for $90,000. The patent has a
remaining legal life of 15 years, but Valley Tech
estimates it will be useful for only 8 years. As of January
1, 2024, the patent's carrying amount on Valley Tech's
books is $67,500. In February 2024, Valley Tech spent
$15,000 successfully defending the patent in court. Valley
Tech still believes the patent will be useful through the
end of 2029.
Prepare Valley Tech's journal entries to record the
amortization for 2022 and 2024.
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Transcribed Image Text:Valley Tech Corporation purchased a patent from Nexus Labs on January 1, 2022, for $90,000. The patent has a remaining legal life of 15 years, but Valley Tech estimates it will be useful for only 8 years. As of January 1, 2024, the patent's carrying amount on Valley Tech's books is $67,500. In February 2024, Valley Tech spent $15,000 successfully defending the patent in court. Valley Tech still believes the patent will be useful through the end of 2029. Prepare Valley Tech's journal entries to record the amortization for 2022 and 2024.
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