Sonic Company has the following research and development activities during 2017-2020: In 2017, Sonic spent...
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Sonic Company has the following research and development activities during 2017-2020: In 2017, Sonic spent $400,000 to develop a new production process. It has applied for a patent for the new process and believed that it will be successful. Economic viability has not been achieved at end of 2017. On 1 February 2018, patent applied in 2017 was granted. Legal costs involved were $200,000. Patent was granted for 20 years where the developed process will be useful for the next ten years' operation. In the beginning of January 2019, there was infringement of patent by a competitor. Sonic spent $100,000 in defending against the patent infringement successfully. Sonic decided the patent can be used till the end of 2029. On 31 December 2020, Sonic estimated that the process only has a value-in-use of $200,000. Required Prepare all the journal entries to record the transactions during 2017-2020, including any amortization involved. Financial year end of the Sonic Company is 31 December
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