Chapter 3
Long-Term Assets
103
AP-10A (
6
)
Mirabella Manufacturing spent several years developing a process for producing widgets.
Its lawyer suggested patenting the process. The company obtained the patent on January 1,
2016. The company paid $100,000 to the lawyer, $25,000 to the government for the patent
and $10,000 in additional fees.
Required
a) Prepare the journal entries to record the cost of the patent.
Date
Account Title and Explanation
Debit
Credit
b) The patent has a life of 20 years. Prepare the journal entry to amortize the patent for one
year on December 31, 2016.
Date
Account Title and Explanation
Debit
Credit
