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P12.1(LO 1,2,3,5)Groupwork(Correct Intangible Assets Account) Reichenbach Co., organ-ized in 2019, has set up a single...

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Accounting

P12.1(LO 1,2,3,5)Groupwork(Correct Intangible Assets Account) Reichenbach Co., organ-ized in 2019, has set up a single account for all intangible assets. The following summary discloses the debit entries that have been recorded during 2020 and 2021.7/1/2010/1/2012/31/201/2/213/1/214/1/216/1/219/1/21Intangible Assets8-year franchise; expiration date 6/30/28Advance payment on laboratory space (2-year lease)Net loss for 2020 including state incorporation fee, $1,000, and related legal fees of organizing, $5,000(all fees incurred in 2020)Patent purchased (10-year life)Cost of developing a secret formula (indefinite life)Goodwill purchased (indefinite life)Legal fee for successful defense of patent purchased aboveResearch and development costs$ 48,00024,00016,00084,00075,000278,40012,650160,000InstructionsPrepare the necessary entries to clear the Intangible Assets account and to set up separate accounts for distinct types of intangibles. Make the entries as of December 31,2021, recording any necessary amortization and reflecting all balances accurately as of that date. (Ignore income tax effects.)

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