During 2013, Blue Corporation spent $145,440 in research and development costs. As a result, a...
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During 2013, Blue Corporation spent $145,440 in research and development costs. As a result, a new product called the New Age Piano was patented. The patent was obtained on October 1, 2013, and had a legal life of 20 years and a useful life of 10 years. Legal costs of $19,440 related to the patent were incurred as of October 1, 2013.
Research and Development Expense
145,440
Cash
145,440
Patents
19,440
Cash
19,440
Amortization Expense
486
Patents
486
Amortization Expense
1,944
Patents
1,944
On June 1, 2015, Blue spent $10,080 to successfully prosecute a patent infringement suit. As a result, the estimate of useful life was extended to 12 years from June 1, 2015. Prepare all journal entries required in 2015 and 2016.
Patents
10,080
Cash
10,080
Amortization Expense
Patents
Amortization Expense
Patents
In 2017, Blue determined that a competitors product would make the New Age Piano obsolete and the patent worthless by December 31, 2018. Prepare all journal entries required in 2017 and 2018.
Amortization Expense
xx,xxx
Patents
xx,xxx
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