The Horstmeyer Corporation commenced operations early in 2018. A number of expenditures were made during...
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Accounting
The Horstmeyer Corporation commenced operations early in 2018. A number of expenditures were made during 2018 that were debited to one account called intangible asset. A recap of the $223,000 balance in this account at the end of 2018 is as follows: Date Transaction Amount 2/3/18 State incorporation fees and legal costs related to organizing the corporation $ 10,000 3/1/18 Fire insurance premium for three-year period 5,000 3/15/18 Purchased a copyright 35,000 4/30/18 Research and development costs 55,000 6/15/18 Legal fees for filing a patent on a new product resulting from an R&D project 5,000 9/30/18 Legal fee for successful defense of patent developed above 27,000 10/13/18 Entered into a 10-year franchise agreement with franchisor 55,000 Various Advertising costs 31,000 Total $ 223,000
Required: Prepare the necessary journal entry to clear the intangible asset account and to set up accounts for separate intangible assets, other types of assets, and expenses indicated by the transactions.
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